By Anna Bahney, CNN Business
Mortgage rates are rising again amid fears of soaring inflation. The 30-year fixed-rate mortgage averaged 3.85% in the week ending March 10, up from 3.76% the week before, according to Freddie Mac.
“Over the long-term, we expect rates to continue to rise as inflation broadens and shortages increasingly impact many segments of the economy,” said Khater. “However, uncertainty about the war in Ukraine is driving rate volatility that likely will continue in the short-term.”
The 30-year rate rebounded this week following a jump in the 10-year Treasury, which topped 1.95%, said George Ratiu, Realtor.com’s manager of economic research.
“Investors worried about mounting inflation stemming from a likely ban on Russian oil imports amid a spike in the price of US crude to more than $130 per barrel, the highest point in 13 years,” he said.
Inflation continued accelerating in February at the fastest pace in 40 years, sparking broader concerns about a consumer spending pullback in the months ahead, Ratiu said. Prices kept rising last month, pushing a key inflation measure to a level not seen since January 1982.
All eyes are on the Federal Reserve which meets next week and is expected to increase the federal funds rate in an attempt to curb inflation.
“The big question on many analysts’ minds is whether a 25-basis point hike will be enough given the significant shortage of labor and inflation at levels not seen since the 1980s,” said Ratiu.
The real estate market continues to experience accelerating prices and record low inventory as the spring sales season heats up.
At today’s rate, the buyer of a median-priced home is facing a mortgage payment that is more than $290 per month higher than a year ago, according to Realtor.com
“With not enough homes for sale, both first-time buyers and homeowners looking for a trade-up home are locked in place by surging prices and higher interest rates,” said Ratiu. “The real challenge for Americans is that the high inflation is eating away at the growth in wages and salaries, on top of spiking housing and living costs.”
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