Fed Rate Hike Boosts Borrowing Costs as Mortgage Rates Reach Nearly 7%

The Federal Reserve raised its benchmark interest rate by a quarter point to about 3.9% on Wednesday, marking the first time it has done so in three years.

The move aims to combat stubbornly high inflation and could lead to higher borrowing costs for mortgages, auto loans, and credit cards.

According to Freddie Mac, the average rate on a 30-year fixed-rate home loan climbed to just below 7%, its highest level in over 19 months.

This is the fourth week in a row that mortgage rates have moved higher, with the average rate reaching 6.95% from 6.76% last week.