Mortgage Rates Rise Back to 7%, Housing Market Re-Freezes, Buyers’ Strike Continues. Prices Are Just Too High
By Wolf Richter
Inflation might not go back into the bottle voluntarily, and these mortgage rates – considered low in 1970-2000 – might stick around.
The average conforming 30-year fixed mortgage rate rose to 7.0% in the latest week, according to the Mortgage Bankers Association today. The daily measure by Mortgage News Daily has been over 7% for days. These are the highest rates since mid-December when they were on their way down.
Mortgage rates had been flirting with 8% back in October last year when the rate-cut mongers fanned out in droves all over the media. Amid enormous hoopla about a gazillion rate cuts in 2024, starting in January, longer-term yields plunged. Mortgage rates plunged with them, with the average 30-year fixed mortgage rate, as tracked by the MBA, falling as low as 6.75% in mid-January. And it was going to be the next boom in the housing market. And then inflation data came in and called for order.
Housing market still frozen.
That relatively small increase in mortgage rates caused mortgage applications to re-plunge – after they’d barely risen from the record lows going back to 1995 – a sign that the housing market remains frozen because prices are still too high, and potential sellers are still thinking that this too shall pass, and potential buyers have figured it out…..
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