Average long-term U.S. mortgage rates were back up this week, just as the latest government data shows inflation has not slowed, meaning the Federal Reserve is almost certain to raise its benchmark borrowing rate later this month.
The Federal Reserve raised its benchmark rate by a half-point in May and another three-quarters of a point last month, the biggest single hike since 1994. Fed policy-makers have signalled that much higher interest rates could be needed to reign in persistent, four-decade high inflation. Most economists expect the Federal Reserve to jack up its borrowing rate another half-to-three-quarters of a point when it meets later this month.
The Fed’s benchmark short-term rate, which affects many consumer and business loans, will now be pegged to a range of 1.5 per cent to 1.75 per cent – and Fed policy-makers forecast a doubling of that range by year’s end. Mortgage applications have declined 14 per cent from last year and refinancings are down 80 per cent, the Mortgage Bankers Association reported this week. Those numbers could retreat further with more Fed rate increases a near certainty.
ForwardForEveryone .... BuildBackBetter WEF have fun being poor, hot, hungry and unsafe
Americans get to deduct mortgage interest payments on their income tax. Makes interest rate hikes a little easier to take I'd imagine.
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