Mortgage Rates May Be Turning a Corner
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That’s how many months it’s been since mortgage rates were as high as they got this week, an unsettling sign for prospective home buyers who may have been lulled by the recent stream of new record lows.
The average interest rate on a 30-year fixed mortgage rose to 2.81% this week, the highest level since mid-November, Freddie Mac said Thursday. The average reported by the Mortgage Bankers Association Wednesday reached a similar three-month high, rising to 2.98%. Both had been breaking new record lows for months, bottoming at 2.65% and 2.85%, respectively, not that long ago.
Low mortgage rates have been the backbone of the booming housing market, fueling demand among buyers laser focused on at-home life and work. But as the economy navigates its recovery from the COVID-19 pandemic, expectations that growth and inflation will increase have stoked an uptick in mortgage rates and closely-related Treasury yields. The question is how much and how quickly will interest rates rise, and when could that shift dampen home sales.