Mortgage interest rates remain firm for another week
- The average mortgage interest rates held firm again this week.
- The average rate on a 15-year mortgage dropped slightly.
- The real estate market has seen an increase in demand during the pandemic.
The median interest rate on a long-term mortgage in the United States held firm again this week. Mortgage agency Freddie Mac reported Thursday that the median rate for the benchmark 30-year fixed-rate home loan fell to 3.10% this week from 3.11% last week. A year ago, the rate stood at 2.71%.
The average rate for a 15-year mortgage also fell slightly to 2.38% this week from 2.39% last week. A year ago, that rate was 2.26%. Many economists expect US mortgage interest rates to increase in the coming months as the Fed turns around the easy money policies it adopted after the coronavirus outbreak devastated the US economy in spring 2020.
Faster credit adjustment
Last week, Federal Reserve Chairman Jerome Powell hinted that the central bank would shift to credit tightening faster than previously suggested. Powell said it would be appropriate for the central bank to consider accelerating the reduction of its bond purchases at its meeting next week. That could lead to the Fed raising its benchmark interest rate as early as spring.
The US housing market has seen a surge in demand during the pandemic as people seek more space after spending a large portion of the past two years working from home. Attracted by low mortgage interest rates, many potential home buyers have been frustrated by a limited supply of homes for sale and rapidly rising prices. Builders have struggled to keep up with the demand as supply chain tangles delay projects.
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