The average rate on the popular 30-year mortgage hit 3.64% on Monday after the Federal Reserve announced plans to offload mortgage-backed bonds sooner than originally expected, according to CNBC. Expectations for a potential boost in economic activity caused bonds to sell off at the fastest pace in 9 months, and potential home buyers could pay the price.
Buyers putting down 20% on a median-priced single-family home at $350,000 can expect a monthly payment $125 higher than prices just three weeks ago. Mortgages have fluctuated throughout the pandemic, rising and falling along with housing demand during each wave of the coronavirus. The latest jump again coincides with pandemic expectations as experts look ahead to upcoming moderation in the Omicron surge after a spike in cases and waning symptoms.
The average rate on the popular 30-year mortgage hit 3.64% on Monday morning, after rising sharply last week, according to Mortgage News Daily. On Friday, the rate was 3.5%, and last Monday it was 3.29%.
“Last week saw bonds sell off at their fastest pace in at least 9 months on a combination of a hawkish pivot from the Fed and paradoxical omicron optimism,” wrote Matthew Graham, chief operating officer at MND. “Corporate bond issuance and looming Treasury issuance added to the selling sentiment.”