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Mortgage rates rise over 3% for first time in 10 weeks

Mortgage rates rise over 3% for first time in 10 weeks

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WASHINGTON — Mortgage rates rose above the 3% mark last week for the first time in 10 weeks, as the economic recovery from the pandemic recession continues while inflation remains elevated.

Mortgage buyer Freddie Mac reported that the average for the key 30-year home loan rose to 3.02% from 2.93% the previous week. By contrast, the rate stood at 3.13% a year ago.

The rate for a 15-year loan, a popular option among homeowners refinancing their mortgages, jumped to 2.34% from 2.24% the week before.

Freddie Mac economists expect mortgage rates to gradually rise in the second half of the year.

A government report Friday showed that consumer spending was flat in May but inflation posted a sizable gain, with prices excluding food and energy jumping by the largest amount in nearly three decades.

The Federal Reserve signaled last week that it may act sooner than previously planned to start dialing back the low-interest rate policies that have helped spark a swift rebound from the recession but also have coincided with rising inflation. Fed Chairman Jay Powell said the inflation spikes of recent months will likely prove temporary.

In other economic news, the government reported Thursday that the number of Americans seeking unemployment benefits last week fell by 7,000, to 411,000, a sign that layoffs declined and the job market is improving. The number of weekly applications for jobless aid has fallen steadily this year from about 900,000 in January.

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