US Mortgage Rates at 4.67%... Highest Since 2018

[Asia Economy Reporter Kim Hyunjung] The average 30-year mortgage rate in the United States has surged to nearly 5%, reaching its highest level since 2018.

On the 31st (local time), the Wall Street Journal (WSJ) reported, citing weekly data from U.S. mortgage finance company Freddie Mac, that the average 30-year fixed mortgage rate in the U.S. stood at 4.67%. This marks an increase from 4.42% a week earlier and is the highest level since December 2018. At the beginning of this year, the average mortgage rate in the U.S. was around 3.22%.

Typically, when mortgage rates rise, housing demand slows down; however, the number of loan applications from U.S. homebuyers increased in three out of the last four weeks, suggesting that the U.S. housing boom is not cooling off. Phil Shoemaker, president of Home Point Financial, a U.S. mortgage lender, said, "To regulate demand, interest rates will need to be raised."

The WSJ noted that expectations of several more interest rate hikes by the Federal Reserve (Fed) to curb inflation are driving mortgage rates higher.

Home prices continue to rise, with the median home sale price in the U.S. in February increasing by 15% compared to the previous year.

As rates rise, refinancing?which was very popular in 2020 and 2021?is declining. According to mortgage data firm Black Knight, about 4 million Americans reduced their monthly mortgage payments through refinancing in February. According to MBA data, refinancing is expected to account for 33% of all mortgage applications this year, down from 59% last year.

This content was produced with the assistance of AI translation services.