US Mortgage Rates On The Rise

Average U.S. Long-Term Mortgage Rates Rose In The Past Week

Long-term mortgage rates in the United States rose last week to begin the new year. They hit their highest level since May 2020, during the coronavirus pandemic, yet remained historically low.

Freddie Mac said that the average rate on the benchmark 30-year home loan climbed to 3.22 % this week, up from 3.11 % last week. The 30-year rate was 2.65% a year ago.

The average interest rate for a 15-year, fixed-rate mortgage rose to 2.43% this week, up from 2.33% last week.

After the Federal Reserve announced last month that it would begin dialing back its monthly bond purchases — which are intended to lower long-term rates — to tamp down accelerating inflation, economists anticipate mortgage rates to rise this year. Even with the expected three rate hikes in 2022, the Fed's benchmark rate would still be below 1%.

In addition to more inflation, experts anticipate strong economic growth and a tight labor market to continue driving interest rates higher.

The number of Americans filing for unemployment insurance rose last week, but remained at historically low levels, according to the government. Last week's jobless claims increased by 7,000 to 207,000, suggesting that the job market remains strong.

The highly transmissible omicron type has yet to be linked to substantial job losses.

Employers are hesitant to let people go when finding replacements is so difficult. The United States had 10.6 million job openings in November, the fifth-highest monthly count on record dating back to 2000. A record 4.5 million Americans resigned their jobs in November's "Great Resignation," indicating that they are satisfied with their career prospects enough to seek something better.

The job market has recovered from the brief but intense coronavirus recession. COVID sparked closures, people huddled at home, and many businesses reduced hours as governments mandated lockdowns and consumers took refuge. In March and April 2020, employers cut over 22 million jobs, with the unemployment rate spiking to 14.8%.

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