Long-term U.S. mortgage rates rose for the seventh straight week, climbing to their highest level in more than a decade.
The average rate on a 30-year mortgage rose to 5.11% from 5% last week, mortgage buyer Freddie Mac reported Thursday. The last time it was higher was in April of 2010 when it reached 5.21%. By contrast, a year ago the 30-year rate stood at 2.97%.
The average rates in recent months are the fastest pace of increases since 1994.
Federal Reserve officials have signaled that they will take an aggressive approach to fighting high inflation this year. In minutes from their March policy meeting released earlier this month, Fed officials said that half-point interest rate hikes, rather than traditional quarter-point increases, “could be appropriate” multiple times this year. The Fed raised its main borrowing rate by a quarter-point in March, its first increase since late in 2018.
On Wednesday, the National Association of Realtors reported that sales of previously occupied U.S. homes fell in March to the slowest pace in nearly two years as a swift rise in mortgage rates and record-high prices discouraged would-be homebuyers as the spring buying season begins.
Median home prices in March jumped 15% from a year ago at this time to $375,300. That’s an all-time high on data going back to 1999, NAR said.
“While springtime is typically the busiest homebuying season, the upswing in rates has caused some volatility in demand,” said Freddie Mac’s Chief Economist Sam Khater. “It continues to be a seller’s market, but buyers who remain interested in purchasing a home may find that competition has moderately softened.”
With inflation at a four-decade high, rising mortgage rates, elevated home prices and tight supply of homes available for sale, the goal of homeownership has become more difficult and expensive, particularly for first-time buyers.
Freddie Mac said the average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, rose to 4.38% from 4.17% last week. One year ago it stood at 2.29%.
The Associated Press contributed to this article.