U.S. mortgage rates increased to a two-year high last week and could keep rising, a trend which may further squeeze first-time buyers struggling to overcome higher home prices and limited housing supply.
Rates for a 30-year fixed-rate mortgage averaged 3.69% for the week ending Feb. 10, up from 3.55% the previous week, according to areleased on Thursday by Freddie Mac. Mortgage rates are now the highest they've been since January 2020, shortly before the start of the pandemic.
"The normalization of the economy continues as mortgage rates jumped to the highest level since the emergence of the pandemic," Sam Khater, chief economist for Freddie Mac, said in a statement.Mortgage rates are likely to continue rising in the coming months as the Federal Reserve raises interest rates to combat higher inflation.
"The escalating prices took a toll on home shoppers," Lawrence Yun, chief economist for the NAR, said in a statement. "A number of families, especially would-be first-time buyers, are increasingly being forced out of the market."Reporting by Jonnelle Marte; Editing by Leslie AdlerSubscribe to our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
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