Mortgage rates climb back above 4 percent
The 30-year fixed mortgage rate in the U.S. exceeded 4 percent on Thursday for the first time since May 2019.
The 30-year rate, the most popular loan package for home buyers, has slowly climbed since hitting a low of 2.77 percent in August, reaching 4.16 percent on Thursday, according to Freddie Mac.
The Federal Reserve on Wednesday announced it was raising interest rates to curb high inflation in the country.
The Federal Open Market Committee raised the federal funds rate — a benchmark interest rate used by banks for loans on credit cards, automobile loans and mortgages — from 0.25 percent to 0.5 percent.
Because of the Fed’s action, prospective home buyers will see higher interest rates on mortgage loans, which could push consumers to buy homes sooner to avoid higher interest rates, economists told The Hill this week.
Consumer demand for home buying spiked during the pandemic, raising home prices 19 percent last year amid limited housing supply in many places.
In Thursday’s analysis, Freddie Mac said consumer interest in home purchasing remains strong.
“While home purchase demand has moderated, it remains competitive due to low existing inventory, suggesting high house price pressures will continue during the spring homebuying season,” the analysis read.