Mortgage rates hit 7%

A Thursday report indicated that U.S. mortgage rates experienced their most significant increase since June, surpassing the 7% mark for the first time since December, which could complicate the growth of home sales.

According to Freddie Mac, the average rate on a 30-year fixed-rate mortgage climbed to 7.10% for the week ending April 18, up from 6.88% the previous week. This 22-basis point jump represents the largest increase in about 10 months.

Sam Khater, chief economist at Freddie Mac, noted, "As rates trend higher, potential homebuyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year. Last week, purchase applications rose modestly, but it remains unclear how many homebuyers can withstand increasing rates in the future."

Although buyers benefited from lower rates on home loans in the fourth quarter of 2023, rates have been on a steady rise since January. However, they still remain below the two-decade highs of nearly 8% seen in October.

High mortgage rates last year contributed to limited housing inventory following the Federal Reserve's rate hike campaign, which began in 2022.