Real Estate

Inflation Pushes Mortgage Rates Above 3%

Mortgage

This week, the 30-year fixed-rate mortgage was back above 3%, and economists expect rates to rise more in the coming months.

“Rising inflation and consumer spending are driving mortgage rates higher,” says Freddie Mac’s chief economist, Sam Khater. “Housing buyers are fueling a strong demand, despite continued inventory constraints that aren’t improving in the face of rising home prices.” This reality exemplifies the housing market’s difficult predicament.”

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 3.10 percent this week. Rates are expected to rise to 3.50 percent by the middle of 2022, according to the National Association of REALTORS®.

“Expect the housing market to slow down in 2022, but remain above pre-pandemic levels,” says Nadia Evangelou, NAR’s senior economist and director of forecasting, on the association’s blog.

For the week ending Nov. 18, Freddie Mac released the following nationwide averages with rates:

30-year fixed-rate mortgages: The average rate was 3.10 percent, with an average of 0.7 points, up from 2.98 percent the previous week. At this time last year, 30-year rates were averaging 2.72 percent.

15-year fixed-rate mortgages: averaged 2.39 percent, with an average of 0.6 points, up from 2.27 percent the week before. 15-year rates averaged 2.28 percent a year ago.

5-year hybrid adjustable-rate mortgages: averaged 2.49 percent with an average of 0.3 points, down from 2.53 percent the previous week. 5-year ARMs averaged 2.85 percent a year ago.

To properly reflect the total upfront cost of getting a mortgage, Freddie Mac publishes average commitment rates combined with average points.

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Samuel Adeshina

Soyiga is a financial reporter whose interests include blockchain, market, business, insurance, and Crypto to provide relevant information to all interested.