Rates on U.S. 30-year mortgages see biggest one-week increase since 1987

Applied Energetics

16/06/2022 21:42

NEW YORK, June 16 (Reuters) - U.S. housing finance giant
Freddie Mac said on Thursday the average contract rate on a
30-year fixed-rate mortgage rose by more than half a percentage
point to 5.78%, the greatest one-week jump in 35 years. 
    Rates on the most popular type of U.S. home loan surged
after the Federal Reserve announced it was raising interest
rates by 75 basis points in an attempt to slow the economy and
quell inflation, which is at 40-year-highs.  urn:newsml:reuters.com:*:nL1N2Y12O3    
    "These higher (mortgage) rates are the result of a shift in
expectations about inflation and the course of monetary policy,"
said Sam Khater, Freddie Mac's chief economist. "Higher mortgage
rates will lead to moderation from the blistering pace of
housing activity that we have experienced coming out of the
pandemic, ultimately resulting in a more balanced housing
market."
    Mortgage rates have risen sharply since this time last year
when the average rate on a 30-year fixed-rate mortgage was
2.93%. 
    Still, more homebuyers sought properties compared to a week
earlier, perhaps signaling a flurry of activity before
aggressive tightening by the Federal Reserve further impacts the
sector, the Mortgage Bankers Association (MBA) said on
Wednesday.  urn:newsml:reuters.com:*:nN9N26W02I
    The MBA's Purchase Composite Index, which covers mortgage
loan applications for single family homes, increased 8.1% from a
week ago. The MBA's Refinance Index rose 3.7%.
    Purchase applications, however, were down more than 15% from
last year as low housing stock and lack of affordability,
alongside climbing rates, appeared to have impacted demand.

 (Reporting by Elizabeth Dilts Marshall; Editing by David
Gregorio)
 ((elizabeth.dilts@thomsonreuters.com; W: (332) 219-1127 C:
(219) 730-7611; Reuters Messaging:
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