Average long-term U.S. mortgage rates edge up to 5.3%

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Average long-term U.S. mortgage rates edged up again this week, with interest on the key 30-year loan at its highest level since 2009.

Mortgage buyer Freddie Mac reported Thursday that the 30-year rate ticked up to 5.3% from 5.27% last week. By contrast, the average rate stood at 2.94% a year ago.

The Federal Reserve last week intensified its fight against the worst inflation in 40 years by raising its benchmark interest rate by a half-percentage point and signaling further large rate hikes to come. The Fed’s move, its most aggressive since 2000, will bring higher costs for mortgages as well as credit cards, auto loans and other borrowing for individuals and businesses.

On Thursday, the government reported that U.S. producer prices soared 11% in April from a year earlier, a hefty gain that indicates high inflation for consumers and businesses will linger in the months ahead.

On Wednesday, the government reported that inflation eased slightly in April after months of relentless increases but remained near a four-decade high. Consumer prices jumped 8.3% last month from a year ago, just below the 8.5% year-over-year surge in March, which was the highest since 1981.

With inflation at a four-decade high, rising mortgage rates, elevated home prices and tight supply of homes for sale, homeownership has become less attainable, especially for first-time buyers.

Some economists predict that home sales this year could decline as much as 10% from 2021 levels.

The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, dipped to 4.48% from 4.52% last week. That rate was 2.26% a year ago.

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4 thoughts on “Average long-term U.S. mortgage rates edge up to 5.3%

  1. For most of my life mortgage rates were over 6%, so I’m not seeing how this is really all that bad. The end of the free money used to stimulate the economy since the last recession had to come at some point.

    1. Amen. People over 50 have probably had at least one mortgage at well over 5.3%.

      In fact, the first one I ever had that low was in 2008…just 14 years ago. For most of my adult life, it was 7% or more.

    2. Adjusting for inflation, what have been the average home prices for most your life?

      If today’s buyers didn’t have to pay an arm and a leg for houses compared to pre-2000 rates, let alone a couple years ago, they would gladly take a higher interest rate.

  2. NOT adjusting for inflation, my monthly P+I for a 2 bed/1 bath, 40-year-old house was between $5-600/month. Adjusting for inflation, that would be $1500-1800/month today…which carries a $300K mortgage at 5.3%

    For that I got an old 2/1 with aluminum siding, original kitchen cabinets and 1940s Formica countertop, ugly peach-pink bathroom tile, and a leaning 1-car garage, in an okay neighborhood inside the pre-Unigov city limits/IPS school district. A $300K house today is considerably bigger, newer, and nicer.

    Tell me again about paying an arm and a leg?