After two consecutive weeks of declines, mortgage rates have moved higher once again. Where they will go in the short term, though, largely depends on what happens overseas. Mortgage rates could fall lower again depending on what happens in Ukraine — and what ripple effects that has on the U.S. economy.
The average rate on the 30-year fixed-rate mortgage was 3.85% for the week ending March 10, up nine basis points from the previous week, Freddie Mac
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reported Thursday. One basis point is equal to 0.01 percentage points, or 1% of 1%.
The 15-year fixed-rate mortgage, meanwhile, rose eight basis points to an average of 3.09%. The 5-year Treasury-indexed adjustable-rate mortgage increased by the same amount over the past week to 2.97%.
The increase in mortgage rates tracked a similar uptick in long-term bond yields, including the 10-year Treasury
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according to Freddie Mac chief economist Sam Khater.
“‘Over the long-term, we expect rates to continue to rise as inflation broadens and shortages increasingly impact many segments of the economy.’”
“Over the long-term, we expect rates to continue to rise as inflation broadens and shortages increasingly impact many segments of the economy,” Khater said in the report. “However, uncertainty about the war in Ukraine is driving rate volatility that likely will continue in the short-term.”
The latest edition of the monthly consumer price index, released Thursday, showed that inflation remains at the highest level since 1982, driven by the rising cost of fuel, food and housing. And now with the U.S. banning imports of oil from Russia following its invasion of Ukraine, gasoline costs are poised to rise even higher, raising the ceiling on inflation.
“The real challenge for Americans is that the high inflation is eating away at the growth in wages and salaries, on top of spiking housing and living costs,” said George Ratiu, manager of economic research at Realtor.com.
For first-time home buyers, every little bit of money they can save counts in today’s competitive housing market. The inventory of homes for sale remains extremely limited, pushing prices higher as buyers compete. And as prices move higher, would-be buyers will need to amass even larger down payments to have a shot at making a winning bid.
Source: https://www.marketwatch.com/story/mortgage-rates-rise-as-the-war-in-ukraine-stokes-volatility-11646925044?siteid=yhoof2&yptr=yahoo