Mortgage charges preserve climbing – KION546

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By Anna Bahney, CNN Business

Mortgage rates continued to rise amid inflation fears and geopolitical uncertainty. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 4.42% for the week ended March 24, up from 4.16% the week before.

The 30-year fixed-rate mortgage rose more than a quarter of a percentage point as mortgage rates continued to rise for all loan types, said Sam Khater, Freddie Mac’s chief economist.

“Rising inflation, escalating geopolitical uncertainty and Federal Reserve actions are driving interest rates higher and sapping consumer spending power,” Khater said. “In short, the rise in mortgage rates coupled with the continued rise in house prices is increasing monthly mortgage payments and is rapidly affecting homebuyers’ ability to keep up with the market.”

Interest rates rose as investors reacted to Federal Reserve Chair Jerome Powell’s comments on Monday that inflation was “far too high” and that the Fed held the option of a larger 50 basis point hike in the upcoming meetings could exercise, said George Ratiu. Economic Research Manager at Realtor.com.

“The key takeaway is that mortgage rates are likely to rise to 5.0% before year-end, with lenders anecdotally reporting offers of around 4.75% for the 30-year fixed rate,” Ratiu said.

That means the window has closed for record-low mortgages, he said, and a return to mortgage rates more typical of what we’ve seen over the past two decades. At today’s rate, the average home buyer is spending more than $300 a month more on their monthly payment than they were a year ago, Ratiu said.

“For buyers and sellers, this spring will offer a transition period where high prices combine with rising interest rates to challenge budgets already struggling with high inflation,” Ratiu said.

The CNN Wire
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