30-year mortgage rate surges to 6.28%, up from 5.5% just a week ago

Abstract

Mortgage rates jumped sharply this week, as fears of a potentially more aggressive rate hike from the Federal Reserve upset financial markets. The average rate on the popular 30-year fixed mortgage rose 10 basis points to 6.28% Tuesday, according to Mortgage News Daily. Rising rates have caused a sharp turnaround in the housing market. Rising rates have so far done little to chill the red-hot home prices fueled by historically strong, pandemic-driven demand and record low supply. "The difference back then was that the Fed had simply decided it was time to finally begin unwinding some of the easy policies put into place after the financial crisis," wrote Matthew Graham, chief operating officer of MND. "This time around, the Fed is in panic mode about runaway inflation." Mortgage rates had set more than a dozen record lows in the first year of the pandemic, as the Federal Reserve poured money into mortgage-backed bonds. That caused the rise in rates that began in January, with the average rate starting the year at around 3.25% and pushing higher each month. Higher home prices and rates have crushed home affordability.