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Are mortgage rates heading back above 7%? Here's what experts think.
CBS News • • business
Key Points:
- Mortgage rates have risen steadily in 2024, reaching an average of 6.71% for a 30-year fixed mortgage, the highest in 13 months, with economists predicting rates could surpass 7%.
- The rise in mortgage rates is primarily driven by turmoil in the bond market, inflation concerns, and increased U.S. government debt, leading to higher borrowing costs linked to the 10-year Treasury yield.
- Inflation remaining above the Federal Reserve's 2% target has increased expectations of a rate hike later this month, contributing to fragile bond market conditions and further upward pressure on mortgage rates.
- Some borrowers are already encountering mortgage rates above 7%, and experts believe rates may stay elevated for an extended period, potentially dampening housing market activity.
- Despite higher borrowing costs, elevated mortgage rates may reduce buyer competition and lower home prices, potentially offering some financial relief to buyers amid the challenging market.
