Mortgage rates spike to 6.81% shutting buyers 'out of the market'

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Mortgage rates are now at their highest level in months as the Federal Reserve prepares for what will likely be yet another interest rate hike later in July.

As of this week, the average rate on a 30-year fixed-rate mortgage was 6.81%, up a tenth of a percentage point from the week before, according to Freddie Mac. Mortgage rates are now the highest they have been since November when they skyrocketed to above 7%.This most recent number is up from a recent trough of 6.08% registered in February. The rate on an average 15-year, fixed-rate mortgage is now sitting at 6.24%.

“Mortgage rates continued their upward trajectory again this week, rising to the highest rate this year so far,” said Sam Khater, Freddie Mac’s chief economist. “This upward trend is being driven by a resilient economy, persistent inflation, and a more hawkish tone from the Federal Reserve. In fact, during much of 2020 and 2021, homebuyers were able to lock in mortgages at below 3% — a dynamic that is now apparent in sales of existing and new homes.

 

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