Mortgage Raises One More Time
According to the latest data from Freddie Mac, this week the mortgage rates rose and this was the first increase after falling for six consecutive weeks. The 30-year fixed-rate mortgage averaged 6.42% ending December 29 in the week, from up to 6.27% the week before and capping a rollercoaster ride of the year for homebuyers that saw rates of the mortgages more than double in less than 12 months.
Sam Khater, Freddie Mac’s chief economist said the housing market remains in the doldrums with decreasing sales, prices, and inventory. He added that the decrease in sales and slowdown in home prices began swiftly earlier in 2022 but recently it has been moderated.
According to a published post by CNN, the intensity of weakness is moderating, the market continues to decline and forward-leading indicators suggest that housing will remain weak throughout the winter.
Last year, the 30-year fixed rate was 3.11% – and a few predicted that rates of 6% would come as a relief, having it falling from over 7%. Home shoppers have watched their buying power be gone, with higher rates adding hundreds of dollars to how each month they would pay
The 30-year fixed-rate mortgage averaged 6.42% in the week ending December 29, up from 6.27% the week before and capping a rollercoaster year for homebuyers that saw mortgage rates more than double in less than 12 months. (Photo: CNN)
Has Inflation Finally Hit Its Peak?
Rates of mortgage rose throughout most of 2022 amid the Federal Reserve’s unprecedented campaign of interest rate hikes that are aimed at taming the soaring inflation. However, in the last several weeks the mortgage rates have fallen, following various data that showed inflation may have finally reached its peak.
George Ratiu, senior economist and manager of economic research said that with an eye toward the new year, investors are weighing this month’s positive economic data against the Federal Reserve’s continued monetary tightening.
He also added that on one hand, the third-quarter gross domestic product was revised upwards twice, the job third-quarterns on solid footing, in eight months inflation has been moderating, and consumer belief hit the highest point.
On the other hand, corporate executives are feeling more bearish on account of higher borrowing costs, with the perceived risk of recession rising. Problems with the business outlook could prompt more company leaders to freeze hiring or resort to broader layoffs in 2023.
