(PatriotWise.com)- Last week, mortgage rates surged to their highest level in twelve years after Federal Reserve officials called for more aggressive rate hikes to contain inflation.
According to a Thursday report from Freddie Mac, the average US rate for a 30-year fixed mortgage rose from 5 percent the previous week to 5.11 percent last week, the highest rate since April 2010. The average fixed rate for a 15-year mortgage also rose to its highest rate since April 2010, climbing to 4.38 percent.
Last week, Fed officials, including St. Louis Federal Reserve Bank President James Bullard and San Francisco Federal Reserve President Mary Daly both said in speeches that the Federal Open Market Committee must increase the pace of rate hikes to combat the fastest inflation growth in forty years.
James Bullard, a voting member of the Federal Open Market Committee warned that the Fed is “behind the curve” in fighting the four-decade-high inflation.
According to Sam Khater, Freddie Mac’s chief economist, mortgage rates reaching a 12-year high at the start of the “spring selling season” has caused “some volatility in demand.” While it may continue to be a seller’s market, Khater explained, homebuyers who are interested in purchasing a home could find “competition has moderately softened.”
In a forecast last Monday, Freddie Mac said the total number of US home sales, for both new and preowned homes, is likely to fall to 6.7 million this year from last year’s 15-year high of 6.9 million. Likewise, Freddie Mac forecasts that the home-price increases will likely slow to 10 percent this year compared to the record 18 percent home-price increases in 2021.
Freddie Mac expects housing demand in 2022 to moderate and home sales to slow due to the increase in mortgage interest rates.
According to a tweet from “Inflation Tracker,” on April 15, a 30-fixed mortgage rate in California was 6.875 percent. However, the source of this information from “Information Tracker” was not provided.
US average 30-year fixed mortgage rates are nowhere near that high.