The mortgage market has seen a significant shift in recent weeks, with rates rising to their highest level of the year. According to data from Mortgage News Daily, the average rate on the popular 30-year fixed mortgage crossed over 7% on April 1, and now sits at around 7.5%, the highest since mid-November last year.
This upward trend in mortgage rates has been attributed to a pick-up in inflation concerns and recent comments from Federal Reserve Chair Jerome Powell. Danielle Hale, chief economist for Realtor.com, said, “Sales data over the next few months is likely to reflect the impact of now-higher mortgage rates.”
Despite these higher rates, mortgage applications to purchase a home rose 5% last week compared with the previous week. However, they are still 10% lower than the same week one year ago.
Economic data shows that the economy and job market remain strong, which is likely to keep mortgage rates at these elevated levels for the near future. Bob Broeksmit, MBA’s president and CEO, said, “Recent economic data shows that the economy and job market remain strong, which is likely to keep mortgage rates at these elevated levels for the near future.”
As affordability weakens, experts advise potential homebuyers to act quickly before rates continue to rise. However, anyone waiting for rates to drop significantly may be waiting for a while, as there is still low historical supply of homes on the market causing them to move faster and competition to increase.
In addition to rising mortgage rates, homebuyers are also facing higher prices due in part to a shortage of
Overall, the current state of the mortgage market is characterized by elevated rates and increased competition among buyers. Prospective homebuyers are advised to act quickly and consult with a financial advisor before making any decisions.
