Mortgage Rates Rise to 22-Month High

Mortgage Rates Rise to 22-Month High

New federal data indicates that people signing papers for a home loan will pay the highest interest rates since the pandemic began.

The rate of the typical 30-year loan has risen to its highest level since early 2020 as the housing market prepares for the expected rate hikes of the Federal Reserve.

According to Freddie Mac data, in the week ending on Jan. 21, the average rate on a benchmark 30-year fixed-rate mortgage increased to 3.56% from 3.45%.

Mortgage rates were last this high during the beginning of the COVID-19 pandemic. Currently, the average rate is 3.65%.

As recently as mid-November, the 30-year rate averaged 3.08%. 
The rates on home loans are influenced by expectations from the Federal Reserve, which has indicated that it plans to hike benchmark U.S. interest rates at least three times during this year in an attempt to cool down inflation, which is at a 40-year high.

In mid-January, Goldman Sachs analysts predicted that four rate hikes would be implemented this year, up from three in their previous projection.

According to the Wall Street investment banking giant, the Fed is likely to commence trimming the extent of its balance sheet as early as July, reducing its bond holdings by almost $9 trillion.

After months of embracing methods to boost the U.S. economy, investors have been alarmed by the central bank's plan to restrict economic policy.
Thanks to an inflation rate not seen in four decades, Americans are already paying more for goods and services.

Data from the federal government indicates that consumer prices increased by 7% for the year ended in December.