Mortgage rates breach 4% for first time since 2019

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FOX Business Gerri Willis reports from Westchester County, New York, on housing prices rising at the fastest rate in 34 years.

Mortgage rates have officially surpassed 4% in the U.S. for the first time since May 2019, and economists expect them to continue to climb.

Freddie Mac's latest Primary Mortgage Market Survey released Thursday shows the average rate for a 30-year fixed-rate mortgage hit 4.16%, up from 3.86% last week and 3.09% from a year ago.

Home for sale sign. (AP Photo/David Zalubowski, File / AP Newsroom)

The data indicated that the average rate for a 15-year fixed-rate mortgage climbed to 3.39% this week, after sitting at 3.09% last week. At this point last year, the same loan type averaged 2.4%.

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Adjustable-rate mortgages are also up at 3.19%. Last week, ARMS were at 2.97%, and the product averaged 2.79% at this time in 2021.

A home for sale and under contract is seen in Silver Spring, Maryland,. REUTERS/Gary Cameron (REUTERS/Gary Cameron / Reuters Photos)

Economists expected mortgage rates to rise after the Federal Reserve raised rates a quarter of a percentage point on Wednesday. 

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Though mortgage rates do not follow the federal funds rate, they do tend to follow the yield on the 10-year Treasury – which also hit its highest level since May 2019 this week, spiking to 2.246% following the central bank's announcement.

"The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year," Freddie Mac chief economist Sam Khater said in announcing the latest numbers. 

People are showing renewed interest in the housing market as the latest figures show a resurgence in mortgage applications last week not seen since last April.ย  (AP Photo/Michael Conroy / AP Newsroom)

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Khater added, "While home purchase demand has moderated, it remains competitive due to low existing inventory, suggesting high house price pressures will continue during the spring homebuying season."

FOX Business' Lucas Manfredi contributed to this report.

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Economy