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Mortgage Rates Jump Above 7%, Setting New High for 2024

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Mortgage rates surged this week, jolting home buyers who may have just started to grow accustomed to borrowing costs in the 6% range. The 30-year fixed-rate mortgage rose to a 7.1% average this week, its highest level since last December, Freddie Mac reports.

“As rates trend higher, potential home buyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year,” says Sam Khater, Freddie Mac’s chief economist. “It remains unclear how many home buyers can withstand increasing rates in the future.”

Home buyers appear to be shrugging off the increases despite the uptick. Mortgage applications for home purchases increased last week, up 5% from the week earlier, according to the Mortgage Bankers Association. Buyers may be in a rush to lock in: “Application activity picked up possibly as some borrowers decided to act in case rates continue to rise,” says Joel Kan, MBA’s deputy chief economist.

For buyers trying to time the market or wait for mortgage rates to drop, they may want to factor in more than just borrowing costs, says Jessica Lautz, deputy chief economist at the National Association of REALTORS®. “For buyers juggling the equation, home prices have increased to the highest price ever for the month of March, and 29% sold above the asking price for the home,” she says. “As the intensity of the spring market reaches a peak in June, it may be better to act before the bidding wars over limited homes on the market gain further traction.”

Freddie Mac reports the following averages with mortgage rates for the week ending April 18:

  • 30-year fixed-rate mortgages: averaged 7.1%, increasing from last week’s 6.88% average. A year ago, 30-year rates averaged 6.39%.
  • 15-year fixed-rate mortgages: average 6.39%, rising from last week’s 6.16%. Last year at this time, 15-year rates averaged 5.76%.

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