Mortgage rates soar to 14 year high, after Fed rate hike
Washington PostJun 16, 2022
According to mortgage-finance giant Freddie Mac, the 30-year fixed-rate mortgage averaged 5.78% for the week ending June 17, climbing 55 basis points from last week's 5.23% and marking the biggest one-week jump in 35 years.
This comes as the Federal Reserve made its biggest rate hike since 1994, rasing its benchmark interest rate by 0.75 percentage points on Wed.
Although the Fed doesn't set mortgage rates, its actions influence them. The central bank waited too long to cool inflation, and now the housing market is paying the price: Mortgage rates are rising faster than the news can keep up with, increasing pressure on an economy already tormented by relentless inflation.
The process of bringing down inflation is unpopular and pain-inducing, but necessary. There is broad consensus among Fed bankers and economists that it's time to increase quantitative tightening to rein in inflation; the Fed is acting well within its mandate to try and tamp down economic pressures.