Mortgage rates have reached their highest level in a year, driven by rising oil prices and persistent inflation. The average 30-year fixed mortgage rate climbed to 6.66% this week, marking the biggest one-week jump in mortgage rates in 10 weeks.

Economic Impact

The increase in mortgage rates is expected to slow down the housing market, with mortgage applications falling 6.4% last week. Refinance applications also plunged by 10% in a week. Despite this, today’s 30-year fixed rate is lower than this time last year, and wage growth has outpaced home-value growth in most parts of the country.

According to loanDepot head economist Jeff DerGurahian, ‘Oil and inflation remain the biggest drivers, and mortgage rates will likely need energy prices to settle and inflation to remain under control before they can move meaningfully lower.’ The Federal Reserve’s decision to keep its benchmark interest rate steady has also contributed to the current mortgage rate landscape.

Original reporting: El Paso News (HLL/CB) — read the source article.