Mortgage rates increased once again this week as the market prepares for another interest rate hike after the Federal Reserve’s meeting later this month.
The 30-year fixed-rate mortgage average rate increased to 5.54% for the week ending July 21, 2022, according to Freddie Mac’s Primary Mortgage Market Survey. This was up from last week when the average 30-year mortgage rate averaged 5.51% and from last year when it averaged just 2.78%.
The average 15-year mortgage rate increased to 4.75%, according to Freddie Mac. That’s up from 4.67% last week and from 2.12% last year. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) decreased slightly to 4.31%, down from 4.35% last week but up from 2.49% last year.
“All eyes are on next week’s meeting of the FOMC, with markets widely anticipating another 75 basis point hike,” George Ratiu, Realtor.com manager of economic research, said in a statement. “The big question is whether 75 basis points will be enough, or if the Fed should push for a 100 basis point increase.”
If you are interested in taking advantage of mortgage rates now before they move higher, consider taking out a mortgage refinance to lower your monthly payments and save money over the life of the loan. Visit Credible to find your personalized interest rate without affecting your credit score.
More rate hikes to come as inflation rises
Inflation surged in June to a new 40-year high, marking the fifth time it’s broken that record this year.
Because inflation remains high, the Federal Reserve is likely to continue raising rates in an attempt to bring it back down, likely driving mortgage rates higher in the weeks to come. The Fed recently released the minutes from its June meeting, showing that another 75-basis point rate hike could be on the table at its Federal Open Market Committee (FOMC) meeting next week.
“Markets are taking the [Federal Reserve’s] remarks with a grain of salt in light of the central bank’s missed signals on inflation last year,” Ratiu said. “The bank argued for the better part of 2021 that inflation was ‘transitory,’ and likely to recede once the supply chain bottlenecks were resolved, only to admit earlier this year that aggressive policy action was needed to remedy accelerating prices.”
Now, concern is growing that even the Fed’s rate setting will not be enough to tamper inflation.
If inflation is hurting you, consider refinancing your mortgage in order to reduce your monthly payment amount. Visit Credible to compare multiple mortgage lenders at once and choose the one with the best interest rate for you.