Omnicron variant Vs Mortgage rates
Mortgage interest rates rose somewhat this week due to concerns over the COVID-19 omicron variant, according to the most recent data from Freddie Mac.
According to the study released on Thursday, the average 30-year fixed-rate loan was only 2.71 percent a year ago at this time. Mortgage rates are currently at an all-time low, but increased interest rates are expected to push them up in the coming months.
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How omicron variant will influence interest rates?
Other loan lengths experienced some fluctuation as well, except 30-year maturities. A 15-year fixed-rate mortgage now has an average rate of 2.39 percent, down from 2.42 percent last week. This is higher than the 2.26 percent recorded in the same period last year. Furthermore, the five-year Treasury-indexed adjustable-rate mortgage (ARM) rose to 2.49 percent, up from 2.47 percent last week but down from 2.86 percent a year ago.
Concerns about the newly discovered omicron variety, as well as other issues, have contributed to the higher interest rates.
“Worries over the new omicron COVID type were offset by hints from the ADP private-sector employment data, which outperformed market forecasts,” said George Ratiu, Realtor.com’s manager of economic analysis. “Markets also took note of Federal Reserve Chairman Powell’s speech before Congress, which suggested that asset purchases – including mortgage-backed securities – could be reduced more quickly as an indication of ongoing economic progress.”
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Since the outbreak of the epidemic, the Federal Reserve has been buying assets worth billions of dollars to help the economy recover. Mortgage-backed securities were among the purchases, which injected a significant amount of liquidity into the mortgage market. Because of the liquidity, lenders were able to lower interest rates to record lows during the COVID-19 crisis; but, without those funds, lenders will have to raise interest rates to make up the gap.
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