Bad news for home buyers: Mortgage rates jump on the back of strong economic data
By Aarthi Swaminathan
U.S. monthly mortgage payments hit new record high amid high rates and home prices
Home buyers, brace yourself for some bad news.
U.S. mortgage rates rose for the second week in a row on the back of stronger-than-expected inflation and employment data.
The 30-year fixed-rate mortgage rose and averaged 6.88% as of April 11, according to data released by Freddie Mac (FMCC) on Thursday.
It's up 6 basis points from the previous week - one basis point is equal to one hundredth of a percentage point.
A year ago, the 30-year was averaging at 6.27%.
The average rate on the 15-year mortgage was 6.16%, up from 6.06% last week. The 15-year was at 5.54% a year ago.
Freddie Mac's weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage.
Separate data by Mortgage News Daily said that the 30-year fixed-rate mortgage was averaging at 7.37% as of Thursday afternoon. The Mortgage Bankers Association's survey noted that the 30-year was at 7.01% as of April 5.
What Freddie Mac said: "Mortgage rates have been drifting higher for most of the year due to sustained inflation and the reevaluation of the Federal Reserve's monetary policy path," Sam Khater, chief economist at Freddie Mac, said in a statement.
What are they saying? "Eager buyers and sellers are hoping to see more favorable housing conditions as the spring selling season kicks off, [but] mortgage rates have offered little relief," Hannah Jones, senior economic research analyst at Realtor.com, said in a statement.
But buyers shouldn't be too disappointed, she added, as new listing activity jumped 15.5% on an annual basis in March.
Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch publisher Dow Jones is also a subsidiary of News Corp.
To be sure, higher rates erode housing affordability: The median monthly U.S. housing payment for a median-priced $378,250 home hit an all-time high of nearly $2,800, according to a separate report by Redfin.
"Housing costs are likely to continue going up for the near future, but persistently high mortgage rates and rising supply could cool home-price growth by the end of the year, taking some pressure off costs," Redfin's economics research lead Chen Zhao noted.
-Aarthi Swaminathan
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
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04-11-24 1202ET
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