This is the second time that the mortgage rate has increased for most types of mortgages.
Mortgage News Daily reports that Friday saw a significant rise in the average 30-year fixed rate to 4.95%. This is now 164 base points higher that it was a year ago.
“That’s the second time this week, and it puts this week on par with the worst week from the 2013 taper tantrum — a record we didn’t see being legitimately challenged a few days ago,” said Matthew Graham, COO of Mortgage News Daily.
As the yield increased, the rate soared. U.S. 10-year TreasuryThe other took off was the mortgage rate. The yield is a loose guideline for mortgage rates, although not all of them. Demand for mortgage-backed bonds also influences mortgage rates. These assets are now being reduced by Federal Reserve. is also hiking interest rates.
As the most important, it couldn’t have come at a better time. spring housing market gets underway. Potential buyers face a shortage of available inventory and high prices. Both rates and prices are significantly higher now that the median mortgage payment has risen more than 20% compared to a year earlier.
The affordability problems are aggravated by the fact that buyers face inflation in all other areas of their budgets. Inflation is also increasing at an unprecedented rate. This means that more buyers will not be able to afford a down payment. Some buyers may not be eligible for mortgages as interest rates go up. In relation to income, lenders are stricter about what amount of debt borrowers can borrow.
The National Association of Realtors chief economist Lawrence Yun said Tuesday that he expects the annual sales rate to drop by 4.5%. Lawrence Yun (chief economist at the National Association of Realtors) said Tuesday that the expected rate of inflation will hover around 4.5% in 2018, after earlier forecasting it to stay at 4%.
NAR predicts sales dropping 3% by 2022. Yun, however, now expects them to fall between 6%-8%. NAR did not update its forecast.