Mortgage rates are on the cusp of 7%. As reflected in the chart below, this move has reversed progress made since December, shaking confidence in an already sluggish housing market.
The government-backed mortgage financer Freddie Mac reported that 30-year fixed mortgage rates increased to 6.88% last week. The Mortgage Bankers Association reported an increase to 7%.
With mortgage rates, a few additional percentage points can increase the costs of interest payments by hundreds of thousands of dollars over a loan's lifecycle. This comes at a time where homeownership generally is expensive: home prices, insurance premiums, property taxes, and maintenance are all elevated.
Homeowners betting on a rate reversal to refinance might have to wait. The housing revival is not yet on the horizon.
Source: Gina Heeb and Kailyn Rhone, WSJ; FRED
Reade Ben is a policy analyst at the Manhattan Institute.
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