Mortgage buyer Freddie Mac reported Thursday that the average rate on the benchmark, 30-year home loan ticked up to 3.11 percent this week from 3.05 percent last week. A year ago, the 30-year rate stood at 2.67 percent.
The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, rose to 2.33 percent from 2.3 percent last week. It was 2.17 percent a year ago.
Many economists expect rates to rise next year after the Federal Reserve announced earlier this month that it would begin dialing back its monthly bond purchases—which are intended to lower long-term rates—to combat accelerating inflation. But even with the expected three rate increases next year, the Fed’s benchmark rate would still be below 1 percent.
Despite historically low interest rates, many would-be home buyers have missed out due to a low supply of available homes that are seemingly getting more expensive by the day. Median home prices are nearly 20 percent higher than they were a year ago, with no signs of relief for frustrated house hunters seeking more space since the pandemic erupted almost two year ago.
Compounding the lack of supply and skyrocketing prices, virus-related supply chain breakdowns have builders delaying projects and struggling to keep up with demand.
By Matt Ott