Source: Yahoo! —
After climbing above 7% for the first time in 20 years, U.S. mortgage rates moved back down this week even as the housing market continues to reel from high borrowing costs.
Rates also dipped despite the Federal Reserve announcing another hike of three-quarters of a point to its trend-setting federal funds rate — a sign that inflation is still refusing to be tamed.
“It seems that (mortgage) rates have already priced in some of the effects of the Fed’s higher interest rates,” says Nadia Evangelou, senior economist for the National Association of Realtors.
Yet, depending on how quickly — or slowly — consumer prices and the still-frothy job market begin to moderate, rates for home loans could soon start ticking up again.
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30-year fixed-rate mortgages
The interest rate on a 30-year fixed mortgage — America’s most popular home loan — averaged 6.95% this week, down from 7.08% one week earlier, housing finance giant Freddie Mac reported Thursday.
Last year at this time, the 30-year rate was averaging 3.09%.
At today’s rate (and today’s prices), the monthly mortgage payment on a median-priced home is $965 higher than it was one year ago, says George Ratiu, senior economist for Realtor.com.
“The dramatic jump in financing costs has effectively shrunk most buyers’ budgets,” Ratiu says.
15-year fixed-rate mortgages
The rate on a 15-year fixed mortgage averaged 6.29% this week, down from 6.36% last week and 2.35% one year ago, Freddie Mac says.
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