Mortgage rates have risen the most since 1987 this past week: Freddie Mac

The 30-year fixed-rate mortgage averaged 5.78% for the week ended June 16. according to published data by Freddie Mac on Thursday. That is 55 basis points more than in the previous week – one basis point corresponds to one hundredth of a percentage point.

The average interest rate on the 15-year fixed-rate mortgage rose 43 basis points to 4.81% over the past week. The 5-year Treasury-indexed adjustable-rate hybrid mortgage averaged 4.33%, up 21 basis points from the previous week.

“Mortgage rates skyrocketed as the 30-year fixed-rate mortgage rose more than half a percentage point, marking the largest one-week rise in our survey since 1987,” said Sam Khater, chief economist at Freddie Mac, in a press release.

“These higher interest rates are the result of a shift in inflation expectations and the stance of monetary policy,” he added. “Higher mortgage rates will lead to a slowdown in the rapid pace of housing activity we’ve seen post-pandemic, ultimately leading to a more balanced housing market.”

The hike in mortgage rates comes a day after the US Federal Reserve raised its benchmark interest rate by 75 basis points – the highest hike since 1994 – in a bid to curb rising inflation.

The yield on the 10-year Treasury note TMUBMUSD10Y, 3.054% rose to over 3.42% in early trade on Thursday morning. Mortgage rates have risen the most since 1987 this past week: Freddie Mac

Brian Lowry

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