Rate for 30-year fixed mortgage reached 5.3% this week
Mortgage rates continue to rise amidst a period of inflation, rising costs, and future economic uncertainty.
Hitting their highest figure since July 2009, the rate for 30-year fixed mortgage rates hit 5.3% this week, up from 5.27% last week.
Mortgage rates have risen more than half a point in the last seven weeks, meanwhile, and are up to 2% since the beginning of the year.
The hike in mortgage rates can be partly blamed on the Federal Reserve’s move to increase interest rates in an effort to stifle inflation.
Unfortunately for prospective home buyers, the rising mortgage rates have added to affordability challenges already being faced as prices continue to rise among a lack of available inventory. Further increases are also expected.
“Homebuyers continue to show resilience even though rising mortgage rates are causing monthly payments to increase by about one-third as compared to a year ago,” Sam Khater, Freddie Mac’s chief economist, told Yahoo! Finance. “Several factors are contributing to this dynamic, including the large wave of first-time homebuyers looking to realize the dream of homeownership.”
The rising mortgage rates don’t seem to be putting off wannabe home buyers, however, with mortgage applications for purchase increase for a second straight week, according to a survey by the Mortgage Bankers Association.
If things continue to get worse financially — such as rising rent, record-high inflation, increasing borrowing costs, and unbending demand — Realtor.com Senior Economic Analyst Joel Berner says a good amount of prospective homebuyers will be priced out.
“The challenges continue to mount for prospective homebuyers. Listing prices are at record highs and homes for sales are at historic lows,” Berner told Yahoo! Finance. “The rising costs of living and falling value of investments make saving for a down payment more difficult, and higher mortgage rates make borrowing for a home more expensive.”