Interest rates on home loans have recently shot past the 7% mark, a record high unseen since the previous year, as reported by mortgage company, Freddie Mac.
As of April 18, 2024, the average rate for a 30-year fixed-rate mortgage (FRM) was at 7.10%, a significant increase from the previous week's average of 6.88%. Compared to the same time a year ago, where the 30-year FRM average was at a lower 6.39%, the rise is quite stark.
Meanwhile, the 15-year FRM also saw an increase, averaging 6.39% up from the previous week's 6.16%, and significantly higher compared to the 5.76% average of the same time the previous year.
Freddie Mac's Chief Economist, Sam Khater, notes that this is the first instance this year where the 30-year FRM has exceeded 7%, jumping from 6.88% to 7.10% within a week. Khater also observed that the current upward trend in rates has prospective homebuyers weighing their options: whether to purchase now before rates climb further, or to wait in anticipation of rate reductions later in the year.
Last week saw a minor increase in mortgage applications, but it still remains uncertain how many potential homebuyers can bear the financial strain of these escalating rates in the future.
