WASHINGTON (AP) — Long-term U.S. mortgage rates continued to climb this week as the key 30-year loan rate reached 5% for the first time in more than a decade amid persistent high inflation.
The average 5% rate on the 30-year mortgage was up from 4.72% last week, mortgage buyer Freddie Mac reported Thursday. The average rates in recent months have been showing the fastest pace of increases since 1994. By contrast, a year ago the 30-year rate stood at 3.04%.
The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, jumped to 4.17% from 3.91% last week.
With inflation at a four-decade high, rising mortgage rates, elevated home prices and tight supply of homes available for sale, the goal of homeownership has become the most expensive in a generation, Freddie Mac says. And this comes as the spring homebuying season begins.
Home prices are up about 15% over the past year and as much as 30% in some cities. Available homes had been in short supply even before the coronavirus pandemic started just over two years ago.
A government report Wednesday showed that the surging cost of energy pushed up wholesale prices a record 11.2% last month from a year earlier — another sign that inflationary pressure is widespread in the U.S. economy. Energy prices, which soared worldwide after Russia’s Feb. 24 invasion of Ukraine, were up 36.7% from March 2021. The wholesale inflation report was issued a day after the Labor Department disclosed that consumer prices in March jumped 8.5% from a year earlier, the fastest annual clip since December 1981.