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Mortgage rates surpass 4% for the first time in almost 3 years

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Yahoo Finance's Julie Hyman reports that mortgage rates have surpassed 4% for the first time in almost 3 years.

Video Transcript

JULIE HYMAN: Well, as you know, you're paying more for almost everything right now. You're paying more for gasoline. You're paying more for food, paying more for a lot of other discretionary items. You're paying more for your house. And now it looks like you're going to be paying more on the loan for that house, because Freddie Mac announced today that the average for a 30-year loan, the average interest rate is now 4.16%.

That's the first time it's been above 4%, going back to April of 2019. We know that rates are likely to rise further because the Fed is raising interest rates. So that's just one more thing to add to the list here. We knew it was going to happen, but nonetheless, it still is notable that it's getting above that level.

At the same time today, we got the report on February housing starts in the US rising more than estimated, at 6.8%. So we know there's a housing supply issue in this country, so the more housing starts happening last month on a month over month basis. That 6.8% increased building permits actually went down 1.9%, although that was a smaller drop than estimated. And Sozz, again, it just speaks to, you know, the prices for a lot of stuff going up right now.

BRIAN SOZZI: Well, Julie, I reckon I better buy my mansion that I'm eyeing very soon in cash. Let's keep it a cash transaction. I don't want to go with that variable interest rate mortgage. Real quickly, though, I want to mention shares of Home Depot and Lowe's. If you are concerned that interest rates might lead to a housing market slowdown this year, just look at these two stocks.

Home Depot shares down 21% year to date. You have Lowe's, shares down 11% year to date. Both stocks underperforming the S&P 500, despite some pretty good fourth quarter numbers and both of these companies being very active in terms of buying back their stock seemingly every single day.

JULIE HYMAN: Yeah, and again, the contrast between these and something like Williams-Sonoma, which was out with its earnings and the shares going up, is pretty remarkable, right, given that trend that we saw the huge surge in buying of these items. Now it's coming down a little bit. It's affecting the likes of a Home Depot and a Lowe's perhaps, but Williams-Sonoma still going strong.

BRIAN SOZZI: They're so expensive, Julie. So expensive. Oh, so expensive.

JULIE HYMAN: Well, I guess the folks who can afford it still can afford it--

BRIAN SOZZI: Like Myles Udland.

JULIE HYMAN: --perhaps is--

BRIAN SOZZI: He's got the money.

JULIE HYMAN: --what's going on, I guess, so.