Mortgage rates are climbing again, raising the cost of a home loan to its highest level in seven months.
The average rate on a typical 30-year mortgage is now 6.91%, up from 6.69% a week ago, the Mortgage Bankers Association (MBA) said Wednesday. The average rate on a 15-year home loan increased to 6.41% from 6.15% a week ago.
Mortgage costs are rising largely because the Federal Reserve’s year-long campaign to tame prices by lifting its benchmark rate has yet to bring inflation close to the central bank’s 2% target, suggesting that more hikes may be necessary.
“Inflation is still running too high, and recent economic data is beginning to convince investors that the Federal Reserve will not be cutting rates anytime soon,” Mike Fratantoni, MBA’s chief economist, said in a statement.
A percentage point increase to a mortgage rate can add hundreds of dollars to a property’s monthly payments, depending on the size of the loan.
Home prices are also rising. The median list price grew to $430,000 in April, up from $406,000 at the beginning of the year, according to Realtor.com. Buying a home is cheaper than renting in only 4 U.S. cities — Cleveland, Detroit, Houston and Philadelphia — according to real estate company Redfin.
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Source: www.cbsnews.com
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