CFAH

Having dropped under 5 percent for the first time in four months last week, driven by an “increased risk of a formal recession and declining consumer confidence overall,” the average rate for a benchmark 30-year mortgage has since jumped 23 basis points (0.23 percentage points) to 5.22 percent.

With the jump over the past week, the current 30-year rate is now 235 basis points and over 80 percent higher than at the same time last year, with the average rate for a 5-year adjustable rate mortgage (ARM) having jumped 18 basis points to 4.43 percent, which is 199 basis points and over 80 percent higher than at the same time last year and nearly 70 percent higher than the average 30-year rate at the beginning of last year.

At the same time, the probability of the Federal Reserve raising the federal funds (“interest”) rate by at least another full percentage point by the end of the year is currently running over 90 percent based on an analysis of the futures market and up from 80 percent last week while the pace of home sales continues to decline, both nationally and locally as well. We’ll keep you posted and plugged-in.

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