Mortgage rates reached 6.9% this week, the highest level seen since last November, according to a weekly survey done by the Mortgage Bankers Association.
Some lenders were also quoting rates for 30-year loans with rates above 7% last week, the association added.
In response to rising rates, purchase applications for a home on a national level decreased once again, dropping about 3% compared to the week before. They were 31% lower than the year prior.
“Application volumes for both purchase and refinance loans decreased last week due to these higher rates. While refinance demand is almost entirely driven by the level of rates, purchase volume continues to be constrained by the lack of homes on the market,” said Mike Fratantoni, the chief economist and senior vice president of Research and Industry Technology.
The jump in rates has put a pause for some buyers looking to get into a home, while others are constrained by high prices that show little signs of dropping.
“People want the best rate possible,” said Diane Mastay, mortgage director of Tropical Credit Union. “I think we would see more activity if our rates were in the fours or fives, but I think it’s a wait-and-see attitude to see if rates will go down.”
Mortgage rates have been on the upswing for the past month, due to economic concerns about inflation and the debt ceiling being raised or not.
“Inflation is still running too high, and recent economic data is beginning to convince investors that the Federal Reserve will not be cutting rates anytime soon,” added Fratantoni.
It remains to be seen if rates will continue to rise in the next few weeks.
“I don’t see them staying high,” added Mastay. “Just in last April they were in the low 6s. I think it’s going to continue to vary a little bit. It’s not going to dip down to the threes and fours, however.”