January 1, Mortgage Rates Skyrocket

Mortgage rates are skyrocketing at a fast pace, leading economists to taper their expectations for home sales this year.

The average rate of a 30-year fixed mortgage reached 4.72% — jumping 26 basis points in four days.

Matthew Graham, the chief operating officer at Mortgage News Daily, points to inflation.

“Rates have a small chance to top out before hitting 5% and a good chance of topping out before hitting 6%,” Graham said.

“It is a rapidly moving target in this environment, where we legitimately and unexpectedly find ourselves needing to be concerned with inflation for the first time since the 1980s.”

People trying to sell their homes also appear to be scaling back their expectations. According to Realtor.com, asking prices slightly fell last week, even amid a competitive market.

“In a potential sign that sellers are mindful of buyers’ tightening budgets as mortgage rates climb, last week’s data showed the first slowdown in asking price growth since January,” said Danielle Hale, Realtor.com’s chief economist.

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Mortgage rates are surging faster than expected, prompting economists to lower their home sales forecasts