Mortgage rates rose once again last week, elevated by economic news that took investors and analysts by surprise.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.90%, up from 6.81%. A year ago at this time, the 30-year FRM averaged 5.30%.
The 15-year fixed-rate mortgage also increased, up to 6.25% from 6.11%. A year ago, it averaged 4.26%.
“The combination of upbeat economic data and the U.S. government credit rating downgrade caused mortgage rates to rise this week,” said Sam Khater, Freddie Mac’s Chief Economist. “Despite higher rates and lower purchase demand, home prices have increased due to very low unsold inventory.”
On Tuesday, leaders at Fitch announced they had downgraded the United States of America’s…
By KIMBERLEY HAAS
Fannie Mae and Freddie Mac were affected this week after Fitch Ratings downgraded the country’s credit rating.
On Tuesday, leaders at Fitch issued a press release saying they had downgraded the United States of America’s Long-Term Foreign-Currency Issuer Default Rating from AAA to AA+.
Fitch is one of three nationally recognized statistical ratings organizations. The other two are Moody’s Investors Service and S&P Global Ratings.
Expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance were cited as reasons for the downgrade.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management. In addition, the government lacks a medium-term fiscal framework, unlike…
Lawrence H. Summers, who served as Bill Clinton’s Treasury Secretary and was one of Barack Obama’s chief economic advisors, says “housing inflation is almost certain to soar in coming months,” and he’s taking the current Treasury chief to task over her rosy view of inflation. Former Treasury Secretary Summers has been sounding the alarm over inflation for months, even as current Treasury Secretary Janet Yellen has claimed the problem is “transitory” and not a significant threat to the economy. In response, Summers has criticized the Biden administration’s economic response to the pandemic, warning that rising inflation isn’t a temporary concern but a long-term problem the Fed will have trouble reining in. “We are printing money, we are creating government bonds,…
Economists and housing industry experts are keeping a close eye on Washington D.C.’s debate over raising the debt ceiling and what it might mean for interest rates. Congressional Democrats are heading into what even Speaker Nancy Pelosi acknowledges is a turbulent week or two, in which her party will attempt to use its narrow majorities to pass two massive spending bills. At the same time, Washington’s about to hit the limit of debt it can issue to keep paying its bills. Treasury Secretary Janet Yellen says the nation will run up against the debt ceiling sometime in October. Democrats are demanding the GOP follow the tradition of previous debt-ceiling votes and support an increase. Republicans, angry over the Democrats’ decision…
