Most loan types experienced an increase in mortgage rates, as the 30-year and 15-year fixed-rate averages reached their highest point in five weeks.
The rise in mortgage rates is a cause for concern for many homeowners and potential buyers. Higher rates can make it more difficult to afford a home, as monthly mortgage payments increase. This can lead to a decrease in demand for homes, which can ultimately impact the overall health of the housing market.
The 30-year fixed-rate mortgage is the most popular type of loan among homebuyers, and its average rate rose to 3.18% this week. This is up from 3.09% last week and marks the highest level since mid-May. The 15-year fixed-rate mortgage also saw an increase, rising to 2.45% from 2.38% last week.
Other loan types also experienced rate increases, with the 5/1 adjustable-rate mortgage rising to 2.84% from 2.80% last week, and the 10/1 ARM increasing to 3.10% from 3.06%.
The rise in mortgage rates can be attributed to a number of factors, including inflation concerns and the Federal Reserve’s recent decision to begin tapering its bond purchases. As the economy continues to recover from the pandemic, inflation has become a growing concern for policymakers. Higher inflation can lead to higher interest rates, which can impact mortgage rates.
The Federal Reserve’s decision to taper its bond purchases is also contributing to the rise in mortgage rates. The central bank has been purchasing billions of dollars worth of bonds each month to help support the economy during the pandemic. However, as the economy continues to recover, the Fed has decided to begin scaling back these purchases. This has led to an increase in bond yields, which in turn has led to higher mortgage rates.
While the rise in mortgage rates may be concerning for some, it’s important to keep in mind that rates are still historically low. Even with the recent increases, rates are still significantly lower than they were just a few years ago. This means that homeowners and potential buyers can still take advantage of relatively low rates to purchase or refinance a home.
However, it’s important to act quickly if you’re considering buying or refinancing a home. Rates are expected to continue rising in the coming months, which means that waiting too long could result in higher monthly payments.
Overall, the rise in mortgage rates is a reminder that the housing market is still subject to a number of external factors. While rates may be low now, they could rise significantly in the future, making it more difficult for some to afford a home. It’s important for homeowners and potential buyers to stay informed about market trends and to act quickly when rates are favorable.