US mortgage rates jump to 5.27%, highest since 2009

MORTGAGE rates in the US resumed their upward climb, reaching the highest level since August 2009.

The average for a 30-year loan jumped to 5.27 per cent from 5.10 per cent last week, Freddie Mac said in a statement on Thursday (May 5).

The Federal Reserve on Wednesday raised its benchmark rate by a half point, the biggest bump since 2000, and signalled further hikes to come in its effort to cool inflation and the overheated housing market. Higher mortgage costs - already up more than 2 percentage points this year - may increasingly push out would-be homebuyers and ease competition for a scarce supply of listings.

“While housing affordability and inflationary pressures pose challenges for potential buyers, house price growth will continue but is expected to decelerate in the coming months,” Sam Khater, Freddie Mac’s chief economist, said in the statement.

Tight inventory is beginning to crimp purchases. But plenty of pent-up demand from the past couple of years and a rising share of cash buyers make a crash in home sales unlikely, according to Matthew Pointon, senior property economist at Capital Economics.  BLOOMBERG

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