US Fixed Mortgage Rate Hits Two-Year High at 7.12%
The US fixed 30-year mortgage rate has surged to its highest level in over two years, reaching 7.12% according to the Mortgage Bankers Association.
This significant increase is attributed to the Federal Reserve's recent decision to lift short-term interest rates to combat inflation and rising oil prices that have driven up Treasury yields underpinning residential borrowing costs.
The Fed increased its policy rate by a quarter of a percentage point to 3.75%-4.00% last week, with nearly all policymakers projecting at least one more rate increase by the end of this year.
Mortgage rates have risen over a full percentage point since late February, when joint US-Israeli strikes against Iran began pushing up global oil prices, putting pressure on prospective homebuyers and cooling the US housing market.