Mortgage rates top 7% for the first time this year, Freddie Mac says

BY Reuters | AGENCY | 04/18/24 12:28 PM EDT

By Amina Niasse

NEW YORK (Reuters) - U.S. mortgage rates increased by the most since June and also crossed the 7% threshold for the first time since December, muddling home sales growth, a Thursday report said.

The average rate on a 30-year fixed-rate mortgage rose to 7.10% for the week ended April 18 from 6.88% the week prior, Freddie Mac reported. The 22-basis point increase was the largest in about 10 months.

"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," said Sam Khater, Freddie Mac's chief economist. "Last week, purchase applications rose modestly, but it remains unclear how many homebuyers can withstand increasing rates in the future."

While buyers saw rates on home loans ease during 2023's fourth quarter, they have steadily increased since January, though rates remain below two-decade highs nearing 8% in October.

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

(Reporting by Amina Niasse; Editing by Chizu Nomiyama)

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