WASHINGTON–Mortgage rates in the U.S. have risen to their highest level since 2014.
According to Freddie Mac data, the average rate on a 30-year fixed-rate mortgage rose to 4.46%, the highest in more than four years and the ninth consecutive week of increases. The average rate on the 30-year was 3.95% when 2018 got underway.
“If the trend persists, it could hamper a sector that represents about 15% of U.S. gross-domestic product,” noted the Wall Street Journal in its analysis. “Rising mortgage rates already have crimped refinancing activity and pushed would-be home buyers who are on the margins out of the market as home prices also have risen.”
Economists also expressed concerns that home sales have slowed in recent months due to inventory levels, tax code changes and people feeling they are priced out of the market.
But at least one economist told the Journal not too much should be made of the rate increases, as historically there is little correlation between the level of the increases that recently have occurred with mortgage rates and declines in home prices.
“It takes a pretty big rise in mortgage rates to offset the strength in the economy that causes rates to rise,” David Berson, chief economist at Nationwide Insurance and a former chief economist at Fannie Mae, was quoted as saying.