Mortgage rates are now at the highest level of the year, and could still climb

The
average
rate
on
the
popular
30-year
fixed
mortgage
crossed
over
7%
on
April
1,
according
to

Mortgage
News
Daily,
and
it
just
kept
going.
It
now
sits
right
around
7.5%,
the
highest
level
since
mid-November
of
last
year.

Rates
hit
their
highest
level
in
a
few
decades
last
October,
causing
home
sales
to
grind
to
a
halt.
Builders
jumped
to
buy
down
rates
for
their
customers
and
managed
to
do
better
than
existing
home
sellers.

Rates
then
fell
through
mid-January
to
the
mid-6%
range
and
held
there
into
February,
causing
a
surge
in
home
sales.
But
then
they
began
rising
again.

“By
mid-February,
a
pick-up
in
inflation
reset
expectations,
putting
mortgage
rates
back
on
an
upward
trend,
and
more
recent
data
and
comments
from
Fed
Chair
[Jerome]
Powell
have
only
underscored
inflation
concerns,”
said
Danielle
Hale,
chief
economist
for
Realtor.com. “Sales
data
over
the
next
few
months
is
likely
to
reflect
the
impact
of
now-higher
mortgage
rates.”

Even
with
rates
higher,
however,
mortgage
applications
to
purchase
a
home
rose
5%
last
week
compared
with
the
previous
week,
according
to
the
Mortgage
Bankers
Association’s

seasonally
adjusted
index.
Demand
was
still
10%
lower
than
the
same
week
one
year
ago,
even
with
rates
now
70
basis
points
higher
than
they
were
a
year
ago.

“Despite
these
higher
rates,
application
activity
picked
up,
possibly
as
some
borrowers
decided
to
act
in
case
rates
continue
to
rise,”
said
Joel
Kan,
MBA’s
chief
economist.

That
may
be
short-lived,
however,
as
affordability
weakens
even
further.
While
there
is
more

supply
on
the
market
now
than
there
was
a
year
ago,
it
is
still
at
a
very
low
level
historically.
That
has
caused
homes
to
move
faster
as
the
competition
increases.
Anyone
waiting
for
rates
to
drop
significantly
may
be
waiting
for
a
while.

“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,”
 said
Bob
Broeksmit,
MBA’s
president
and
CEO.