Mortgage rates hit their highest level since 2009 this week – with the 30-year fixed rate mortgage averaging 5.27%.
At this time last year, rates averaged just below 3%. This is the fastest rate of increase in decades.
The rise in mortgage rates comes as the Federal Reserve raised interest rates by 0.5% on Wednesday, the biggest increase in 22 years.
Officials say the move is aimed at fighting inflation, but could also impact mortgage and credit card bills.
To put it simply, rising interest rates will make it more expensive for Americans to borrow money.
Sacred Heart economics professor Khawaja Mamun says the increase people will see on their credit card bills will likely be well over 0.5%.
Mortgage rates have moved from the mid-2s to the high-5s, although many buyers are still shut out of the market.
Mortgage experts at Main Street Mortgage in Stratford say locking in your rate is a great idea. But they say if you wanted to get ahead of the current mortgage rate hike, you should have acted months ago.
“We’ve already jumped, so our rates are practically up more than 2-2.5% since January,” broker David Bigley said.
Bigley says variable rate mortgages are starting to make a comeback as current rates begin to look less attractive, but he expects rates to climb before they stabilize.
The Fed says another 0.5% rate hike is on the table for its next meeting in six weeks.