Average Long-Term US Mortgage Rates Rise; 30 years at 5.55%

WASHINGTON (AP) — Average long-term U.S. mortgage rates rose this week as inflation concerns remained front and center and slowing economic growth weighed on the housing market.

Mortgage buyer Freddie Mac reported on Thursday that the 30-year rate rose to 5.55% from 5.13% last week. Last year, at this time, the rate was 2.87%.

The average rate on 15-year fixed-rate mortgages, popular among those looking to refinance their homes, jumped to 4.85% from 4.55% last week.

Rapidly rising interest rates — which are adding hundreds of dollars to monthly mortgage payments — have pushed many would-be buyers away this year, cooling the once-hot housing market.

The National Association of Realtors said last week that sales of existing homes fell for the sixth straight month in July, dragged down by rising mortgage rates and home prices that continue to rise steadily, albeit at a slower pace.

The U.S. economy contracted at an annual rate of 0.6% from April to June, the government said Thursday in an update to its initial estimate. It marked a second consecutive quarter of economic contraction, which meets with an informal sign of recession. Most economists, however, said they doubted the economy was in recession or about to, given that the US labor market remains robust.

In an effort to rein in the worst inflation the United States has seen in four decades, the Federal Reserve launched its fastest round of interest rate hikes — four times this year — since the early 1980s.

Inflation worries are front and center as Fed officials and leading economists meet this week at their annual symposium in Jackson Hole, Wyoming, to discuss global economic challenges. A speech by Fed Chairman Jerome Powell on Friday could signal how much or how quickly the central bank could raise interest rates in the months ahead.

Mortgage rates do not necessarily reflect Fed rate hikes. They tend to track the yield of 10-year Treasury bonds, which are influenced by a variety of factors, including investors’ expectations for future inflation and global demand for US Treasury bonds.

Recently, faster inflation and strong economic growth in the United States have caused the 10-year Treasury rate to rise sharply.

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