Rates Top 7% For The First Time In 2024

Average mortgage rates surpassed 7% for the first time in 2024 last week.

Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.1%, jumping from the week prior’s 6.88%. A year ago at this time, the 30-year FRM averaged 6.39%.

The daily rate shot up to 7.5% in the middle of this week.

The 15-year fixed rate increased from 6.16% to 6.39%. A year ago, it averaged 5.76%. 

“As rates trend higher, potential homebuyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year. Last week, purchase applications rose modestly, but it remains unclear how many homebuyers can withstand increasing rates in the future,” said Sam Khater, Freddie Mac’s Chief Economist. 

Recent inflation data turned the market sour, resulting in last week’s upticks. Housing costs remained elevated in March, with the shelter component of the Consumer Price Index rising 0.4% from February.

Inventory is looking more and more likely to remain depleted this year, denying homebuyers any recourse to lower buying costs. The total price of buying a home hit another record high in the past few weeks.

New construction and existing home sales both fell in March, two pain points that will push more Americans out of the market in the coming months.

But desperate buyers could bolster the spring season. Some demand metrics like home tours are on the rise. The prevailing idea among a certain subset of buyers may be to move fast before rates and prices get any worse.

“Home sales are slower than usual, but there are still people buying and selling because if not now, when?” Connie Durnal, a Redfin agent in Dallas, noted.

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