Mortgage Rates Increase To Near 5%

Livermore, CA

Homes in Livermore, CA have continued to increase in price as demand remains high heading into 2022. With the current moves in interest rates, what can we expect moving forward? Not only does a higher sticker price impact buyers, but now the interest rates are adding pressure.

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The rate for the most common kind of mortgage just surged again.

The average rate on the 30-year fixed mortgage shot significantly higher Friday, rising 24 basis points to 4.95%, according to Mortgage News Daily. It is now 164 basis points higher than it was one year ago.

The rate surged as the yield on the U.S. 10-year Treasury also took off. Mortgage rates follow that yield loosely, but not entirely. Mortgage rates are also influenced by demand for mortgage-backed bonds. The Federal Reserve is scaling back its holdings of these assets and is also hiking interest rates.

It couldn’t come at a worse time, as the all-important spring housing market gets underway. Potential buyers are already facing extraordinarily tight supply and sky-high prices. With both rates and prices considerably higher, the median mortgage payment is now more than 20% higher than it was a year ago.

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