New Mortgage Rate Spike Threatens California Housing Market

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Freddie Mac's weekly average as of April 18 rose above 7 percent for the first time this year.

The continued rise in mortgage rates is likely to make homeownership unaffordable for large swathes of households in California and stifle the supply of homes for sale, housing economists say—a development that could make prices shoot up as competition for homes escalates.On Thursday, Freddie Mac revealed that borrowing costs for home loans soared above 7 percent for the first time this year. As of April 18, the 30-year fixed rate mortgage averaged 7.1 percent compared to 6.

The median price of a home in the Golden State hit its highest level in seven months in March, going up by close to 8 percent to $855,000 from a year ago. High prices have helped stifle supply as sellers sitting on low mortgages are reluctant to sell and enter a market that will ask for 7-plus mortgage rates.High prices have made affording a home beyond the grasp of a huge chunk of Californian households.

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Mortgage Rates Spike Could Upend Housing MarketRising mortgage rates could have a chilling effect at one of the busiest times of the year for home sales.
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