The average rate on the famous 30-year fixed mortgage marked 4.72% yesterday, moving 26 basis points above since Friday, as reported by Mortgage News Daily.
As a result of the latest increase in mortgage rates, economists are now reducing their home sales predictions for this year.
It was estimated that the mortgage rates will hit 4.5% by the end of 2022, but the war in Ukraine, inflation, and rising oil prices have all contributed to the increase in interest rates. In March 2021, mortgage rates were around 3.45%
A shift in the approach from the central bank, suggesting far more hikes in interest rate than expected is pushing bond yields even higher.
Matthew Graham, chief operating officer at Mortgage News Daily said, “Rates have a small chance to top out before hitting 5% and a good chance of topping out before hitting 6%. It is a rapidly moving target in this environment, where we legitimately and unexpectedly find ourselves needing to be concerned with inflation for the first time since the 1980s.”
Economists had anticipated the interest rate to increase only little this year, but that perception is now changing.