Mortgage rates surge past 7%, reaching highest level since November
Washington (CNN) — Mortgage rates soared this week, breaching the key 7% threshold and extending America’s home affordability crisis.
Posted — UpdatedThe 30-year fixed-rate mortgage averaged 7.10% in the week ending April 18, up from 6.88% the previous week, according to Freddie Mac data released Thursday. A year ago, the average 30-year fixed-rate was 6.39%.
Breaching 7% represents a psychological threshold that hadn’t yet been crossed this year.
Mortgage rates are climbing based on expectations that the Federal Reserve won’t cut interest rates anytime soon. The Fed doesn’t directly set mortgage rates, but its actions do influence them, and persistently hot inflation readings are keeping the Fed on hold.
“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.” said Sam Khater, Freddie Mac’s chief economist, in a statement.
In a separate report, the National Association of Realtors reported that US home sales declined sharply in March in a sign that homebuyers are waiting on the sidelines as they contend with a tough housing market.
This story is developing and will be updated.
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