Mortgage rates reach highest level in more than a decade

According to Freddie Mac, the 30-year fixed-rate mortgage was down for the week ending 21. April averaged 5.11%, down from 5% the week before. It is the seventh straight week of increases and significantly higher than the average of 2.97% around this time last year.

The last time rates reached this level was in April 2010, when they reached 5.21%, according to Freddie Mac.

"While spring is typically the busiest season for home buying, the rise in interest rates has created some volatility in demand," said Sam Khater, chief economist at Freddie Mac. "It's still a seller's market, but buyers who remain interested in purchasing a home may find that competition has lessened somewhat."

Buyers have been scrambling to get a home before prices rise too much. Those who couldn't secure a lower rate can't afford the much higher payments on today's homes, said George Ratiu, manager of economic research at That's starting to show up in sales numbers, with existing home sales down 2.7% in March from February – even though prices hit an all-time record.

More affordable starter homes are also harder to find because there are so few on the market. The combination of tight inventory and rising rates is also weighing on sales in the middle of the market, he said.

"With the cost of financing a home about 40% higher than a year ago, home demand is visibly cooling as many first-time buyers are unable to qualify for a home mortgage that meets their needs," Ratiu said.

The rise in rates this week follows the continued rise in 10-year Treasury bonds, which topped 2.8% for the first time since December 2018, said George Ratiu, manager of economic research at

The Federal Reserve does not set mortgage rates, but its actions indirectly affect them. U.S. government bonds – particularly 10-year Treasury notes – are a poster child for fixed-rate mortgages. When 10-year Treasury bond yields rise, mortgage rates tend to rise as well.

And mortgage rates are likely to continue to rise, Ratiu said. The Fed is expected to act more aggressively in the coming months to curb high inflation, and the central bank is widely expected to raise interest rates by 50 basis points at its next meeting in May.

"The Fed's intention to cool demand seems to be working, leading real estate markets to a much-needed equilibrium," Ratiu said.

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