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Mortgage Rates Soaring at Fastest Pace Since 1972: Freddie Mac

Mortgage Rates Soaring at Fastest Pace Since 1972: Freddie Mac
(Marius Scarla/Dreamstime)

By    |   Friday, 25 May 2018 12:51 PM

Interest rates on U.S. 30-year fixed-rate mortgages recorded seven-year highs even as Treasury yields have retreated from multi-year peaks due to worries about U.S.-China trade tension and concerns about Italy and Turkey, Freddie Mac said on Thursday.

The jump in mortgage rates this year may exacerbate the tightness in home inventories as some homeowners may decide not to sell their properties, Freddie Mac's chief economist Sam Khater said.

“Mortgage rates so far in 2018 have had the most sustained increase to start the year in over 40 years,” Khater said in a statement.

“Through May, rates have risen in 15 out of the first 21 weeks (71 percent), which is the highest share since Freddie Mac began tracking this data for a full year in 1972,” he said.

“At a time when housing inventory remains extremely low, it’s worth watching whether these higher borrowing costs lead some would-be sellers to stay put in their current home. Inventory shortages would likely worsen if more homeowners decide not to sell out of reluctance of having a new mortgage with a higher rate,” Khater said in a statement.

Thirty-year mortgage rates averaged 4.66 percent in the week ended May 24, the highest since the week of May 5, 2011, Reuters reported. A week earlier, 30-year rates averaged 4.61 percent, the U.S. mortgage finance agency said.

Last Friday, the yield on benchmark 10-year Treasury notes rose to 3.128 percent, the highest since July 2011, according to Reuters data.

Fifteen-year loan rates averaged 4.15 percent, up from 4.08 percent from the prior week.

Interest rates on five-year adjustable rate mortgages averaged 3.87 percent, higher than 3.82 percent the week before.

Meanwhile, in the first few months of 2018, U.S. home prices jumped more than in any first quarter since 2006, Bloomberg reported.

Single-family home prices rose 6.9 percent from the first quarter of 2017, according to data released Thursday by the Federal Housing Finance Agency. That’s the most for the start of a year since 2006 -- when the gain was over 9.1 percent -- and the highest for any quarter since 2013.

(Newsmax wire services contributed to this report).

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The jump in mortgage rates this year may exacerbate the tightness in home inventories as some homeowners may decide not to sell their properties, Freddie Mac's chief economist Sam Khater said.
mortgage, rates, fifty years, 1972, rise, soar, home loans
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2018-51-25
Friday, 25 May 2018 12:51 PM
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