Finance
Mortgage rates are nearing 7% as inflation ticks back up: Freddie Mac
The 30-year fixed-rate mortgage averaged 6.88% this past week, according to Freddie Mac. (iStock )
Mortgage rates continue their steady climb upward. Rates for 30-year mortgages averaged 6.88% this past week, Freddie Mac reported. Rates last week averaged 6.82%, and a year ago, the 30-year fixed-rate mortgage averaged 6.27%.
“Mortgage rates have been drifting higher for most of the year due to sustained inflation and the reevaluation of the Federal Reserve’s monetary policy path,” Sam Khater, Freddie Mac’s chief economist said.
Borrowers looking for 15-year mortgages also saw average rates go up this week. The average 15-year rate was 6.16%, up from last week when it averaged 6.06%. Inflation is pushing these rates higher, but the beginning of the spring buying season is also bringing more demand, adding to the rising rates.
“It’s clear that while the trend in inflation data has been close to flat for nearly a year, the narrative is much less clear and resembles the unrealized expectations of a recession from a year ago,” Khater said.
Visit an online marketplace like Credible to compare rates, choose your loan term, and get preapproved with multiple lenders.
SPRING HOMEBUYING SEASON BRINGS SLIGHTLY MORE OPTIMISM AS LISTINGS CONTINUE TO RISE
Monthly mortgage payments just hit an all-time high
Mortgage interest rates are adding to the overall cost of getting a mortgage. According to data from Redfin, over the period of four weeks ending April 7, the average mortgage payment was $2,747, an all-time high.
“For homebuyers, the latest CPI report means mortgage rates will stay higher for longer because it makes the Fed unlikely to cut interest rates in the next few months,” Redfin Economic Research Lead Chen Zhao said.
High sale prices on homes contribute to overall high costs as well. The median sale price in April is $378,250, which is up 4.5% year over year. This is just $5,000 less than the record high in June 2022. With demand also rising, prices are likely to stay high for the near future. A potential increase in houses for sale could bring some relief, though.
“Housing costs are likely to continue going up for the near future, but persistently high mortgage rates and rising supply could cool home-price growth by the end of the year, taking some pressure off costs,” Zhao said.
As more homes come on the market, you have more homebuying options. Make sure you’re ready with the right mortgage lender and rate. Head to Credible today to compare rates and lenders in minutes.
HOME LISTINGS ARE RISING, BUT BUYERS AREN’T BUYING DUE TO HIGH INTEREST RATES
Homeowners insurance expected to rise 6% this year
Adding on to the list of high housing costs — homeowners insurance costs aren’t expected to drop anytime soon.
Homeowners insurance rates are projected to go up by 6% in 2024, according to an Insurify study. This means rates could end the year at $2,522, on average. Rates have steadily been rising over the years. Annual rates increased by 19.8% between 2021 and 2023, going from $1,984 to $2,377, on average. Increases largely affected states that dealt with more frequent natural disasters.
Floridians pay the most for their home insurance policies, averaging an annual rate of $10,996 in 2023. Florida’s homeowners are likely to see a 7% increase in 2024 and will pay an average of $11,759 annually. The state with the second-highest home insurance rates is Louisiana.
The average homeowner in Louisiana pays $6,354 annually. Currently, residents don’t have the highest rates in the country, but after the projected 23% hike expected in 2024, this may change.
Credible can walk you through each homeowner’s insurance policy and coverage. Plus, they can tell you how to save hundreds on homeowners insurance each year.
HOME INSURANCE COSTS ARE HIGHEST IN THESE STATES – HERE’S HOW TO LOWER YOUR PREMIUMS
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Katie Stockton thinks she has a viable option for investors trying to withstand wild market swings.
She manages the Fairlead Tactical Sector ETF (TACK), which is designed to be nimble in times of market stress. It’s not tied to an index.
“What we try to do is help investors leverage the upside through sector rotation, but also minimize drawdowns,” the Fairlead Strategies founder told CNBC’s “ETF Edge” this week. “That’s obviously a big advantage longer term when you can just go into a less deep hole to climb out of.”
According to Stockton, her ETF is particularly nimble in this environment because it uses multiple strategies — not just one. Since President Donald Trump announced his “reciprocal” tariffs on April 2, the ETF has fallen just over 4%, while the S&P 500 has lost 6.9%.
Stockton’s ETF rotates monthly between all 11 S&P 500 sectors.
“We don’t own technology anymore,” Stockton said. “Some of the sectors that we like to invest in have fallen out of favor.”
As of April 16, the fund’s top sector holdings included consumer staples, utilities and real estate, according to Fairlead Strategies.
As of Thursday’s close, the Fairlead Tactical Sector ETF is down 4% so far this year.
Meanwhile, ETFs that are centered around specific sectors or strategies are largely under pressure. For example, the Invesco Top QQQ Trust (QBIG), which tracks the top 45% of companies in the Nasdaq-100 index, is down 22% in 2025.
The GraniteShares YieldBoost TSLA ETF (TSYY) is off 48% since the beginning of the year.
BTIG’s Troy Donohue, the firm’s head of Americas portfolio trading, thinks Stockton’s ETF employs a sound strategy – particularly during the recent “dramatic pullback.”
“TACK is a great example of how you can be nimble during these market times,” Donohue said. “It’s great to see it in an ETF product that has performed really well during this recent drawdown.”
Sign at the entrance to a Capital One bank branch in Manhattan.
Erik Mcgregor | Lightrocket | Getty Images
Capital One Financial‘s application to acquire Discover Financial Services in a $35.3 billion all-stock deal has officially been approved by the Federal Reserve and the Office of the Comptroller of the Currency, the regulators announced on Friday.
“The Board evaluated the application under the statutory factors it is required to consider, including the financial and managerial resources of the companies, the convenience and needs of the communities to be served by the combined organization, and the competitive and financial stability impacts of the proposal,” the Fed said in a release.
Capital One first announced it had entered into a definitive agreement to acquire Discover in February 2024. It will also indirectly acquire Discover Bank through the transaction.
Under the agreement, Discover shareholders will receive 1.0192 Capital One shares for each Discover share or about a 26% premium from Discover’s closing price of $110.49 at the time, Capital One said in a release.
Capital One and Discover are among the largest credit card issuers in the U.S., and the merger will expand Capital One’s deposit base and its credit card offerings.
After the deal closes, Capital One shareholders will hold 60% of the combined company, while Discover shareholders own 40%, according to the February 2024 release.
In a joint statement, Capital One and Discover said they expect to close the deal on May 18.
WATCH: Jamie Dimon on Capital One’s $35.3 billion Discover acquisition: ‘Let them compete’
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