It was nice while it lasted, but the decline in mortgage rates that accompanied the pandemic has now been completely erased, by one measure.
The average 30-year fixed mortgage rate, as measured by Freddie Mac, reached 3.69% this week, surpassing its pre-COVID-19 reading for the first time. As the chart below shows, the pandemic-era dip is over after the recent sharp uptick.
The ultra-low mortgage rates of the pandemic (the 30-year reached a record low of 2.65% in January 2021) increased purchasing power for homebuyers and helped fuel a surprising homebuying boom. But now you can blame inflation for the fact that they’re over: As yields on 10-year Treasuries go, so go rates for fixed-rate mortgages, and investor concerns about today’s red-hot inflation—and the Federal Reserve’s response to it—have driven those yields sharply higher.
The recent spike in mortgage rates makes buying a home less affordable for people who are already facing high sticker prices and a shortage of choices, according to economists at the National Association of Realtors.
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