Mortgage rates in the U.S. are getting closer to 4%.
The average for a 30-year loan was 3.92%, up from 3.69% last week and the highest since May 2019, Freddie Mac said in a statement Thursday.
It was the second straight jump in borrowing costs, tracking a surge in yields for 10-year Treasuries, which last week topped 2% for the first time since July 2019. The Federal Reserve is weighing a series of hikes to its benchmark lending rate in an effort to curb the highest inflation in 40 years.
That may push mortgage costs up further, adding to the burden for Americans who are already stretching to afford a purchase. Bidding wars for the country’s tight supply of listings have already priced out many would-be buyers.
“As rates and house prices rise, affordability has become a substantial hurdle for potential homebuyers, especially as inflation threatens to place a strain on consumer budgets,” Sam Khater, Freddie Mac’s chief economist, said in the statement.
Rates are more than a full percentage point higher than they were about a year ago, when the 30-year average hit a record low of 2.65%.
Even before the recent increases, mortgage payments for first-time buyers had jumped to more than 25% of household incomes in the fourth quarter, the worst affordability rate in three years, according to data from the National Association of Realtors.
This article was provided by Bloomberg News.