WASHINGTON (AP) — Average long-term U.S. mortgage rates rose in the past week to start the new year. They reached their highest level since May 2020, at the height of the coronavirus pandemic, yet remained historically low.
Mortgage buyer Freddie Mac reported Thursday that the average rate on the benchmark 30-year home loan increased to 3.22% this week from 3.11% last week. A year ago, the 30-year rate stood at 2.65%.
The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, rose to 2.43% from 2.33% last week.
Many economists expect mortgage rates to rise this year after the Federal Reserve announced last month that it would begin dialing back its monthly bond purchases — which are intended to lower long-term rates — to tamp down accelerating inflation. But even with the expected three rate increases in 2022, the Fed’s benchmark rate would still sit below 1%.
In addition to stronger inflation, experts expect robust economic growth and the tight labor market to continue to push rates higher.
