Mortgage rates climbed above 7% this week for the first time in 2024, continuing their upward trajectory and putting further pressure on the housing market.
Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage jumped to 7.1% this week from 6.88% last week. The average rate on a 30-year loan was 6.39% a year ago.
The average rate on the 15-year fixed mortgage rose to 6.39% from 6.16% last week. One year ago, the rate on the 15-year fixed note averaged 5.76%.
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“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. “Last week, purchase applications rose modestly, but it remains unclear how many homebuyers can withstand increasing rates in the future.”
The combination of persistently elevated rates and record-high home prices has left the housing market stalled for months, as many would-be buyers and sellers remain on the sidelines waiting for affordability to improve.
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According to a recent Realtor.com survey, almost eight out of 10 potential sellers said they still feel locked in to their homes and nearly half of these “locked-in” sellers plan to wait for lower rates.
That is contributing to the ongoing shortage of inventory, which is keeping home prices sky-high — and out of reach for many would-be buyers.
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