Mortgage rates hit highest level since November after hot inflation report

Mortgage rates rose to their highest since November as the much-anticipated rate cut schedule was extended until 2024.

The average 30-year fixed mortgage rate on Wednesday reached 7.29%, the highest since November. daily mortgage news.

The jump followed the release of new consumer price index inflation data for March, which came out slightly better than economists expected. The data raised concerns that the U.S. Federal Reserve would postpone its expected rate cut in 2023.

Mortgage rates have risen significantly since the start of 2022, roughly in line with rate increases set by a committee of Fed officials. The central bank raised borrowing costs from near zero in March 2022 to a range of 5.25% to 5.5% last July, and kept interest rates unchanged at subsequent meetings.

The average interest rate on a 30-year fixed mortgage peaked at 8% in October, according to the Daily Mortgage Index. Mortgage rates fell below 7% in December after the Federal Reserve signaled several rate cuts in 2024, but new economic data shows the fight against inflation has plateaued. Therefore, it rose again.

Still rising prices, employment and growth data pushed back the timeline for borrowing cost reductions. New government figures released on Wednesday revealed an increase in inflation in March, with the index rising 3.5% year-on-year.

High mortgage rates are hitting home buyers hard, especially first-time home buyers. To avoid high borrowing costs, more than a third of homes were purchased in February with all-cash deals, and median down payments rose 24.1 percent from a year ago, according to a recent report from real estate firm Redfin. It is said that he did. Buyers who cannot afford those options.