Mortgage rates hit 5.78%, the biggest weekly jump since 1987

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ExpressLane

Verified User
Mortgage rates surged by more than half a percentage point this week amid rising inflation and an interest rate hike by the Federal Reserve, according to Freddie Mac. The jump is the largest one-week increase since 1987.

The 30-year fixed-rate mortgage averaged 5.78% in the week ending June 16, up from 5.23% the week before. Rates have risen more than two-and-a-half percentage points this year. They were at an average of 2.93% this time last year.

"These higher rates are the result of a shift in expectations about inflation and the course of monetary policy," said Sam Khater, Freddie Mac's chief economist. "Higher mortgage rates will lead to moderation from the blistering pace of housing activity that we have experienced coming out of the pandemic, ultimately resulting in a more balanced housing market."
Rates have risen sharply since January, pushing the cost of financing a home up significantly.

https://www.cnn.com/2022/06/16/homes/mortgage-rates-june-16/index.html
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Bidenflation is causing housing costs to skyrocket. A $1700 mortgage a year ago will cost you $2400 now. Young people are having problems finding housing they can afford. I have a nephew who I helped get through fire school and now he is a fireman. I encouraged him to live with his parents for a year or two and save his money then to put a down payment down for a home. He did that and will be moving in soon. Fortunately he got in just under the wire. He could not afford the same house today.


Thanks Brandon.
 
ExpressLane said:
Mortgage rates surged by more than half a percentage point this week amid rising inflation and an interest rate hike by the Federal Reserve, according to Freddie Mac. The jump is the largest one-week increase since 1987.

The 30-year fixed-rate mortgage averaged 5.78% in the week ending June 16, up from 5.23% the week before. Rates have risen more than two-and-a-half percentage points this year. They were at an average of 2.93% this time last year.

"These higher rates are the result of a shift in expectations about inflation and the course of monetary policy," said Sam Khater, Freddie Mac's chief economist. "Higher mortgage rates will lead to moderation from the blistering pace of housing activity that we have experienced coming out of the pandemic, ultimately resulting in a more balanced housing market."
Rates have risen sharply since January, pushing the cost of financing a home up significantly.

https://www.cnn.com/2022/06/16/homes/mortgage-rates-june-16/index.html
===============================================

Bidenflation is causing housing costs to skyrocket. A $1700 mortgage a year ago will cost you $2400 now. Young people are having problems finding housing they can afford. I have a nephew who I helped get through fire school and now he is a fireman. I encouraged him to live with his parents for a year or two and save his money then to put a down payment down for a home. He did that and will be moving in soon. Fortunately he got in just under the wire. He could not afford the same house today.


Thanks Brandon.
Click to expand...

Housing was on an unsustainable pace though. It was in true bubble territory.
 
cawacko said:
Housing was on an unsustainable pace though. It was in true bubble territory.
Click to expand...
It wasn't doing that bad before inflation. Under the Trump administration the average income for a family rose $6,500 and interest rates were low so more Americans could afford homes.
 
ExpressLane said:
It wasn't doing that bad before inflation. Under the Trump administration the average income for a family rose $6,500 and interest rates were low so more Americans could afford homes.
Click to expand...

The Fed kept rates artificially low for far too long which (over) boosted the housing market. It wasn’t healthy or sustainable. (It’s also the reason institutional investors got into the housing market at the rate they have.)
 
really bad news for realtors, banking and construction.

dont need sales men if there is nobody buying
dont need loan originators if there is nobody buying
dont need to build new if nobody is buying

ditto manufacturing, lumber, steel

and similar issues with people being priced out of car buying
of eating out
of travel
of entertainment
 
Celticguy said:
really bad news for realtors, banking and construction.

dont need sales men if there is nobody buying
dont need loan originators if there is nobody buying
dont need to build new if nobody is buying

ditto manufacturing, lumber, steel

and similar issues with people being priced out of car buying
of eating out
of travel
of entertainment
Click to expand...

This is true but it’s not justification for the Fed’s policies over the past decade. Trying to avoid any economic pain only creates more pain down the line
 
cawacko said:
This is true but it’s not justification for the Fed’s policies over the past decade. Trying to avoid any economic pain only creates more pain down the line
Click to expand...


the issue was the Fed's unspoken agenda which was to drive up stocks. that sure as hell was not going to have a happy ending.
 
Celticguy said:
the issue was the Fed's unspoken agenda which was to drive up stocks. that sure as hell was not going to have a happy ending.
Click to expand...

Stocks and housing prices. And it wasn’t even really that unspoken in that they often referenced the “wealth effect” meaning people feeling wealthier would spend more money thus boosting the economy. That’s fine and dandy and all except it’s not sustainable when they keep rates artificially low for so long.

So I understand people not liking mortgages rates rising but they never should have been that low for that long.
 
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