Mortgage

U.S. average long-term mortgage rates rise; 30-year at 3.22%

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Written by Publishing Team

Average long-term mortgage rates in the US rose last week to kick off the new year. It reached its highest level since May 2020, at the height of the coronavirus pandemic, but has remained historically low.

Mortgage buyer Freddie Mac reported Thursday that the average 30-year home loan interest rate rose to 3.22% this week from 3.11% last week. A year ago, the 30-year average was 2.65%.

The average interest rate on 15-year fixed-rate mortgages, which is popular with those refinancing their homes, rose to 2.43% from 2.33% last week.

Many economists expect mortgage rates to rise this year after the Federal Reserve announced last month that it would begin to roll back its monthly bond purchases — aimed at lowering long-term interest rates — to curb accelerating inflation. But even with the three rate hikes expected in 2022, the Fed’s benchmark interest rate will still be below 1%.

In addition to stronger inflation, experts expect strong economic growth and a tight labor market to continue to push interest rates higher.

The government reported Thursday that the number of Americans filing for unemployment benefits rose last week but remained at historically low levels, indicating that the labor market remains strong. US jobless claims rose by 7,000 last week to 207,000.

The highly transmissible omicron variant does not yet appear to have caused a significant number of layoffs.

Employers are reluctant to let workers go at a time when alternatives are hard to find. The US posted 10.6 million jobs in November, the fifth-highest monthly total on records going back to 2000. 4.5 million Americans quit their jobs in the “Great Resignation” in November – a sign that they’re confident Enough in their prospects to search for something better.

The job market has recovered from the short but severe recession that occurred last year due to the Coronavirus. When the Covid-19 virus hit, governments ordered lockdowns, consumers crowded their homes and many businesses closed or reduced working hours. Employers cut more than 22 million jobs in March and April 2020, and the unemployment rate rose to 14.8%.

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