US Home Mortgage Rates at Highest Mark in 7 Years+
- Home borrowing costs will continue rising throughout the year in this strong economy
Home mortgage rates in the US rose for a 5th week running, marking levels not seen in more than 7 years and are expected to continue to rise into Y 2019.
The average rate for a 30-year fixed mortgage was 4.72%, up from 4.65% last week and the highest since April 2011, Freddie Mac said in a statement Thursday.
The average 15-year rate climbed to 4.16% from 4.11%, Freddie Mac, the McLean, Virginia-based mortgage finance company in its Thursday statement.
Rising rates are adding to the cost of home ownership in the US after years of rising home prices that have outpaced income gains.
Wednesday, the FOMC (Federal Reserve policy makers), citing strong job growth, raised the benchmark interest rate for the third time this year and reaffirmed their outlook for further gradual increases well into Y 2019.
Interest rates are rising because the economy is strong and getting stronger. But the rising interest rates may start to take a toll on borrowers after some point in time. In the US home mortgage market people do not really know what the point may be.
Home borrowing costs will continue rising throughout the year, with 30-year fixed rates hitting 5% before Y 2019, according to the chief economist for Realtor.com. The 30-year average was 3.83% last year at this time.
This week it was reported that contracts to buy previously owned US homes fell in August by the most in 7 months, led by a slowdown in the West, where prices have shot up significantly, the National Association of Realtors said Thursday.