Prospective homebuyers have enjoyed historically low mortgage rates over the last few years, but those enticing rates may be coming to an end.
The 30-year fixed-rate mortgage averaged 4.16% for the week ending March 17 and consumers should be prepared for the rate to increase even more, according to CNN. The 30-year fixed rate hasn’t averaged more than 4 percent since May 2019, according to The New York Times.
A variety of factors have pushed the key rate higher, including rising inflation, Russia’s invasion of Ukraine and supply chain disruptions, CNN reported.
On Wednesday, the Federal Reserve increased interest rates for the first time since 2018. While the quarter of a point increase is not directly tied to mortgage rates, the latter are influenced by investors’ reactions to such federal actions.
Rising mortgage rates could reduce refinancing demands and cool down what has been a hot housing market, The Wall Street Journal reported.
Even with expected increases over the coming year, mortgage interest rates likely will remain low by historical standards, Keith Gumbinger, vice president at HSH.com, told The New York Times.
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