Mortgage rates have climbed to their highest point in nearly 15 years, presenting new challenges for potential home buyers as the Federal Reserve continued its efforts to slow down inflation, according to the federally backed loan company best known as Freddie Mac on Thursday.
A new report from the Federal Home Loan Mortgage Corporation said the mortgage rate average for a 30-year fixed loan climbed to 6.02% Thursday, an increase of 0.13% over the past week and 3.16% over the same time in 2021.
Freddie Mac said average mortgage rates have not been that high since 2008 during the Great Recession.
“Mortgage rates continued to rise alongside other-than-expected inflation numbers this week, exceeding six percent for the first time since late 2008,” Freddie Mac said in a statement.
“Although the increase in rates will continue to dampen demand and put downward pressure on home prices, inventory remains inadequate. This indicates that while home price declines will likely continue, they should not be large.”
Average mortgage rates for a 15-year fixed mortgage rose 0.05% last week to 5.21%, 3.09% higher than 2021. Adjustable mortgage rates, known as ARMs., rose to 4.93%, an increase of 0.29% from last week and 2.42% since September of last year.
The 30-year mortgage rate was 3.22% to start 2022 but has steadily climbed as the economy struggled with rapidly climbing inflation.
The Fed has raised rates by substantial and historic increments at its last three policy meetings — a half-point hike in May and a pair of 0.75% hikes in June and July. The next decision will come on Sept. 21, and there will be two more meetings in November and December.
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