Mortgage rates climb to highest level in 9 months
CNN • • business
Key Points:
- The average 30-year fixed mortgage rate in the US rose to 6.51%, the highest since August last year, driven by turmoil in the bond market linked to the war with Iran and rising oil prices.
- Mortgage rates correlate with the 10-year Treasury yield, which surged due to inflation concerns, with April's Consumer Price Index showing a 3.8% increase, the highest since May 2023.
- Higher mortgage rates have increased monthly payments significantly; for example, a $450,000 home loan's monthly payment rose by about $124 compared to rates at the end of February, adding over $44,000 in costs over 30 years.
- The housing market is showing signs of weakness with mortgage applications down 2.4% year-over-year and existing home sales barely increasing, impacted by both higher borrowing costs and economic uncertainty from geopolitical tensions.
- Despite the rate increase, mortgage rates remain below last year's peak, but high rates combined with near-record home prices continue to pose significant barriers to homeownership.