By MATT OTT
AP Business Writer
WASHINGTON (AP) — Average long-term U.S. mortgage rates jumped last week to their highest level in more than two years, potentially bumping some homebuyers out of the market with Americans getting squeezed by higher costs for just about everything.
The average rate on the 30-year loan jumped nearly a quarter point to 3.69% last week, mortgage buyer Freddie Mac reported Thursday. After rising nearly a half-point early in the year, the average long-term rate had been flat for three weeks. A year ago, the long-term rate was 2.73%.
Although it’s still historically low, the average rate for a 30-year mortgage hasn’t been this high since the first week of January 2020 when it was 3.72%.
The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, was 2.93%. It stood at 2.77% a year ago.
The Federal Reserve has signaled that it would begin the first in a series of interest rate hikes in March, reversing pandemic-era policies that have fueled hiring and growth but also contributing to inflation levels not seen in some 40 years.
The Labor Department said Thursday that consumer prices jumped 7.5% last month compared with 12 months earlier, the steepest year-over-year increase since February 1982. Higher costs for just about everything has hammered consumers, wiping out pay raises and reinforcing the Federal Reserve’s decision to begin raising borrowing rates across the economy.
Home prices have risen up even more. Depending on where you are seeking to live, the price for a new home has broadly risen about 14% and as much as 30% in some cities. Housing has been in short supply even before the pandemic, and higher prices and rising interest rates will make it even harder for those seeking a move to buy a new home.