Mortgage interest rates are increasing at their fastest rate in nearly 30 years. According to the latest report by Freddie Mac, the current average rate for a 30-year fixed mortgage is now 4.72%. That’s up 1.59% from the same time last year. The average 15-year mortgage is now 3.9%, up 1.48% from last year.
The increasing mortgage rates are likely due to a number of factors including:
- Inflation which is currently at 8%
- Housing inventory shortages due to a pause in construction during the pandemic,
- High lumber prices which also hindered construction,
- The Federal Reserves recent vote to raise rates by .25%; it’s first vote to hike rates since 2018.
According to Cabot Phillips at the Daily Wire,
Some real estate experts say that increasing mortgage rates should cool the market a bit. Remember, mortgage rates were down around 2% during the pandemic, so a lot of people were simply able to afford houses that a few years earlier, when rates were higher, would’ve been out of their price range. Some experts believe that until the supply of houses meets the overwhelming demand that we’re seeing right now, prices will continue to rise.