For the first time since 2019, mortgage rates are rising above 4%

Mortgage rates are not directly linked to the federal financial ratio. Instead, they monitor the yield of 10-year Treasury bonds, which are affected by factors including the central bank’s moves and investor reactions to inflation.

“Mortgage rates should continue to rise throughout the year as the Federal Reserve raises short-term rates and signals further increases,” said Sam Cader, chief economist at Freddie Mackin.

Rising inflation and uncertainty in Ukraine are affecting rates.

“Inflation is unlikely to ease at any time,” said George Rattio,’s economic research manager. “Investors are reacting to the deepening war in Ukraine and expect renewed supply chain disruptions to add further pressure on consumer prices.”

All of these factors will continue to raise mortgage rates in the coming months, he said. That means one of the main drivers of home sales over the past two years – very low mortgage rates – is drying up.

“The record-low mortgage rates have helped many first-time buyers to extend their budgets in 2020 and 2021,” Ratiu said. “The lower rates have helped homeowners reduce their monthly mortgage payments through refinancing. However, the days of sub-3% interest rates are definitely behind us and we have not yet settled the market base of supply and demand.”

The balance is still there Registration is low And home prices continue to rise. Skyrocketing rent Buying a home – even with high prices and rising interest rates – puts extra pressure on the market. Financial sense rather than rent In some markets.

But the cost of housing is rising. Not only will house prices rise, but at today’s prices, the average homebuyer’s monthly mortgage will be $ 340 more than it was a year ago, which will add $ 4,000 more to their annual burden, Ratiu says.

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But higher prices could reduce competition in the home market, he said.

“We expect home prices to remain moderate as rising mortgage rates and inflation squeeze the buyer’s package,” Ratiu said.

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