Homebuyers, builders, Realtors, and pretty much everyone connected to the housing industry hoped this spring would be a robust one for sales because of declining mortgage rates. But as the Wall Street Journal reports, things are going in the opposite direction. Rates are now heading back toward 7%, a threshold they haven't been at since December. A survey of lenders by Freddie Mac put the figure for a fixed 30-year mortgage at 6.88% on Thursday, and another assessment by the Mortgage Bankers Association put the average rate at 7% on the nose.
"When you start to cross whole numbers, psychologically, people get a little nervous," Alex Elezaj of United Wholesale Mortgage tells the newspaper. Stubbornly high inflation is dimming hopes of three interest-rate cuts from the Fed, which is contributing to fears that mortgage rates could climb all the way back to 8%, per the Street. Other stars would have to align in a bad way for that to happen, including a steep jump in oil prices and worsening violence in the Mideast and Ukraine. In the meantime, "this is the worst market I've ever seen," a Re/Max broker tells the Journal. (More home sales stories.)
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