Mortgage Rates at 7% Are Making Everything Worse for US Homebuyers
With supply tight and prices rising, deals are frozen with little relief in sight.
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For a generation of homebuyers used to rock-bottom borrowing costs, a surge to 6% mortgage rates was shock enough. But this month’s jump past 7% is adding a whole new layer of uncertainty to the US housing market.
Deals are cooling further, with loan applications for purchases falling last week to the lowest level in almost three decades. Many buyers are locking in rates now, afraid to wait and risk getting caught in the next upsurge. And tight inventory is bringing the opposite of what typically happens in a real estate downturn: Even as sales fall, prices are climbing.