U.S. mortgage rates rose to a 12-year high, continuing a rapid surge in borrowing costs that may start to lower the temperature on the overheated housing market.
The average for a 30-year loan was 5.11%, up from 5% last week and the highest since April 2010, Freddie Mac said in a statement Thursday. Rates have jumped from just 3.11% at the end of last year.
The housing market, which got a lift from historically low rates early in the pandemic, now is seeing loan costs rising at the fastest rate in decades. Purchase prices have continued to soar, but sales are beginning to stall as buyers fight over a scarcity of listings. Some home-shoppers are putting off their searches, unable to afford higher mortgage bills.
“While springtime is typically the busiest homebuying season, the upswing in rates has caused some volatility in demand,” Sam Khater, Freddie Mac’s chief economist, said in the statement. “It continues to be a seller’s market, but buyers who remain interested in purchasing a home may find that competition has moderately softened.”
Rates have followed along with yields for 10-year Treasuries, which last week crossed the 2.8% mark for the first time since late 2018. Relief for borrowers isn’t likely to come any time soon: The Federal Reserve is set to consider another increase to its benchmark rate next month in its efforts to control inflation.
This article was provided by Bloomberg News.