WASHINGTON — Long-term U.S. mortgage rates continued to climb this week as the key 30-year loan rate reached 5 percent for the first time in more than a decade amid persistent high inflation.
The average 5 percent rate on the 30-year mortgage was up from 4.72 percent last week, mortgage buyer Freddie Mac reported Thursday.
The average rates in recent months have been showing the fastest pace of increases since 1994. By contrast, a year ago the 30-year rate stood at 3.04 percent.
The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, jumped to 4.17 percent from 3.91 percent last week.
With inflation at a four-decade high, rising mortgage rates, elevated home prices and tight supply of homes available for sale, the goal of homeownership has become the most expensive in a generation, Freddie Mac says. And this comes as the spring homebuying season begins.
Home prices are up about 15 percent over the past year and as much as 30 percent in some cities. Available homes had been in short supply even before the coronavirus pandemic started just over two years ago.
A government report Wednesday showed that the surging cost of energy pushed up wholesale prices a record 11.2 percent last month from a year earlier — another sign that inflationary pressure is widespread in the U.S. economy.
Energy prices, which soared worldwide after Russia’s Feb. 24 invasion of Ukraine, were up 36.7 percent from March 2021.
The wholesale inflation report was issued a day after the Labor Department disclosed that consumer prices in March jumped 8.5 percent from a year earlier, the fastest annual clip since December 1981.