30-year mortgage rates soared to 7.39% in April, rising an average of 0.01% and reaching their peak for 2024, as reported by the Mortgage News Daily platform.
On the other hand, the costs of 15-year fixed-rate mortgages had a similar increase to those of 30 years (0.01%), standing at 6.83%.
This increase caused a drop in mortgage demand of 2.7% last week, according to the Mortgage Bankers Association (MBA). Consequently, sales of new and second-hand homes also plummeted, with transactions plummeting 4.3% in March compared to February data.
"Mortgage rates continued to move higher last week, reaching their highest levels since late 2023 and putting a damper on applications activity," said Joel Kan, vice president and deputy chief economist at MBA.
Home sellers are also affected, as they see a reduction in the number of buyers who cannot afford a mortgage with such high rates. "Purchase applications declined, as home buyers delayed their purchase decisions due to strained affordability and low supply," Kan noted.
As reported by Fox Business, many economists predict that mortgage rates will not decrease until the end of the first half of 2024. They indicate that this reduction will only occur when the Federal Reserve (FED) begins to reduce them.
