Mortgage rates hit their highest levels since the start of the pandemic

People who sign papers for a new home loan will pay the highest interest rates since the pandemic began, according to new data released by the federal government.

Mortgage rates for the typical 30-year loan have reached their highest levels since the start of 2020, as the housing market looks to expected rate hikes from the Federal Reserve.

The average rate on the benchmark 30-year fixed-rate home loan was 3.56% in the week ending Thursday, compared with an average of 3.45% last week, according to data from mortgage giant Freddie Mac.

The last time mortgage rates were this high was at the start of the pandemic. In March 2020, the average rate was 3.65%.

That’s a big change from mid-November, when the 30-year average rate was 3.08%.

Interest rates on home loans are affected by expectations from the Federal Reserve, which has signaled that it will likely raise benchmark U.S. interest rates at least three times this year in a bid to calm inflation, which is stuck at 40-year highs.

Goldman Sachs analysts said last week they now expect even more rate hikes – four – this year, down from three in its previous projections.

People looking for a home loan will have to pay more interest as rates rise to their highest level since the start of the pandemic.
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Additionally, the Wall Street investment banking giant predicts the Fed will begin shrinking the size of its balance sheet as early as July, trimming its holdings of nearly $9 trillion in bonds.

The central bank’s plan to tighten monetary policy, after months of adopting methods intended to support the US economy during COVID-19, has spooked investors in recent weeks.

Americans are already paying more for goods and services thanks to runaway levels of inflation not seen in four decades.

Consumer prices jumped 7% for the year ending December, according to federal data.

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