Mortgage rates continued to rise this week along with hotter-than-expected inflation number, Freddie Mac reported today. The 30-year fixed-rate mortgage average exceeded six percent for the first time since late 2008 when the country was in the midst of the financial crisis. It now stands at 6.01 percent compared to 2.86 percent a year ago. The 15-year fixed-rate mortgage average was 5.21 percent.
The jump in mortgage rates is one of the strongest results of the Federal Reserve’s effort to curb inflation by lifting the cost of borrowing. In the housing market it has added hundreds of dollars or more to the monthly cost of a potential buyer’s mortgage payment. This has resulted in slowing the red-hot market. With the Federal Reserve expected to continue its efforts to tame inflation, mortgage rates are expected to continue to rise. This downward pressure on home prices, however, is offset in part by inadequate inventory, observed Freddie Mac, adding that “while homes price declines will likely continue they should not be large.”