Freddie Mac reports that mortgage rates rose by more than a half-point this week due to growing inflation and a Fed rate move. The gain is the biggest since 1987.
The 30-year fixed-rate mortgage averaged 5.78 percent in the week ending June 16. Rates have jumped 2.5 percent this year. Last year, they averaged 2.93 percent.
Sam Khater, Freddie Mac's senior economist, said higher rates reflect a change in inflation and monetary policy expectations.
Higher mortgage rates will slow house activity after the epidemic, leading in a more balanced housing market.
Since January, rates have climbed dramatically, increasing home loan costs.
Inflation and financing costs make properties less affordable for buyers.
A year ago, a buyer who put 20% down on a $390,000 property and financed the remainder with a 30-year, fixed-rate mortgage at 2.93 percent had a monthly mortgage payment of $1,304.