U.S. Mortgage Interest rates increased For 4th Straight Week

Latest data released shows that the interest rate on U.S. home loan increased for a fourth straight week last week, with residential real estate borrowing costs now the highest in nearly two years as financial markets anticipate that the Federal Reserve will raise rates sooner and faster than previously expected to combat the looming inflation.

The Mortgage Bankers Association on Wednesday said its weekly measure of the average contract rate on a 30-year, fixed-rate mortgage climbed to 3.64% in the week ended Jan. 14 from 3.52% a week earlier.

With inflation running at the highest rate in a generation and the job market near full employment, the Fed is now seen rapidly reining in the accommodation it put in place in the spring of 2020, and financial markets are frantically repricing for an initial rate hike by the central bank by mid-March, Reuters reported.

According to the present data, the overall loan application volumes rise at 2.3% last week on the back of a 7.9% increase in loans to buy a home, while refinancing applications dropped 3.1% to their lowest level in more than two years.

©Photo: Fortune