Mortgage Rates Surge, Dampening Spring Homebuying Season

This marks the largest one-week increase since April 2025 and the largest three-week increase since October 2024, as reported by Realtor.com. Just four weeks ago, the rate had dipped below 6% for the first time since late 2022.

The recent surge is attributed to skyrocketing oil prices, fueled by the war with Iran, which intensifies worries about high inflation. The 10-year Treasury yield, a key guide for home loan pricing, climbed to 4.39% from 4.26% a week ago.

Higher inflation expectations could prevent the Federal Reserve from cutting interest rates; Chair Jerome Powell highlighted an uncertain economic outlook last week. The U.S. housing market has experienced a slump since 2022, with sales of previously occupied homes flat last year at a 30-year low and remaining sluggish this year.

Mortgage applications fell 10.5% last week, according to the Mortgage Bankers Association, with both purchase and refinancing loans declining. Joel Berner, senior economist at Realtor.com, states rising rates are a major barrier to a favorable spring homebuying season.

MBA CEO Bob Broeksmit confirms higher borrowing costs, affordability pressures, and economic uncertainty prompt buyers to delay decisions.