According to Freddie Mac, the 30-year fixed-rate mortgage averaged 5.23% in the week ending June 9, up 5.09% from the previous week. The rate remains well above the average of 2.96% compared to this time last year.
“After a few moves in recent weeks, mortgage rates have risen again due to rising economic activity and incoming inflation data,” said Sam Khater, chief economist at Freddie Mac.
Rates rose in anticipation of Friday’s inflation data and reflected the 10-year Treasury rebound, which reached 3% in mid-week, said George Ratiu, senior economist and economic research manager at Realtor .how.
“Investors have their eyes on the consumer price index, hoping to see continued gains but at a moderate pace,” he said, adding that the data will be an important measure for the Federal Reserve at its meeting. next week.
The Fed is expected to raise rates again at its next policy decision meeting. Mortgage rates tend to follow 10-year U.S. Treasury bonds. But rates are being affected indirectly by the Fed’s actions on inflation. As investors see or anticipate rate hikes, they often sell government bonds, which increases yields and, with it, mortgage rates. Mortgage applications have fallen, with weakness in both purchase and refinancing applications causing the market index to fall to its lowest level in 22 years, according to Joel Kan, vice president of economic forecasting and of the Mortgage Bankers Association industry.
Homebuyers are looking for a monthly mortgage payment that is 53% higher than a year ago, adding an additional $ 670 to their monthly expenses.
To aggravate these pressures, Ratiu said, nearly 20 states have average gasoline prices above $ 5 a gallon, which raises living expenses to new highs, mostly because employers are asking workers to return to offices.
“The economic outlook depends heavily on the well-being of the American consumer,” Ratiu said. “For many Americans looking for affordable housing pockets, medium-sized cities remain a viable alternative, especially as the number of homes for sale has increased, providing new options.”