Mortgage Rates Near 7% Crush US Housing Market

The US housing market is struggling due to rising mortgage rates, which have now reached their highest level in over 19 months. The weekly average rate on a 30-year fixed-rate home loan climbed to 6.95% from 6.76% last week, according to Freddie Mac.

This is the fourth consecutive week of rising mortgage rates, and experts warn that this trend may continue due to inflation and Federal Reserve policy. The benchmark 10-year Treasury yield has also breached 5% for the first time since 2023, further driving up borrowing costs.

Mortgage rates are a key factor in determining how much homebuyers can afford, and rising rates have made it increasingly difficult for prospective buyers to enter the market. The National Association of Realtors reported that pending US home sales fell 4.7% from August last year, indicating potentially sluggish home sales in coming months.

Experts predict that further rate hikes may set the stage for a continued slowdown in the housing market. 'The rate hike all but guarantees that mortgage rates will remain stuck at or above the 7% threshold,' said Lisa Sturtevant, chief economist at Bright MLS.