That’s how many months it’s been since mortgage rates were last this high, and why surging house prices are making homeownership an increasingly costly proposition.
The average rate for homebuyers getting a 30-year fixed mortgage jumped from 3.33% to 3.42% Tuesday, the highest since at least April 20, when data provided to The Balance begins. Fixed mortgage rates tend to move in step with the yields on 10-year Treasury bills, and those yields—which often rise with growing inflation fears—have been ticking up as central banks around the world signal surging consumer prices will require them to back off their easy-money policies.
The 3.42% is within shooting distance of the 2021 high of 3.51%, reached in March, according to our data. The recent jump in interest rates is especially unwelcome in the pandemic era because the relatively low rates of the last 18 months have been helping to offset sky-high sale prices that mean homeownership is eating up more income than at any time in more than a decade. Rates that reached record lows in 2020 (the 30-year bottomed at 2.89% in 2020, according to our data) were almost twice as high as recently as 2018.
“Historically speaking, rates are still low, but many potential homebuyers are staying on the sidelines due to high home price growth,” Sam Khater, chief economist for mortgage giant Freddie Mac, wrote in an analysis last week. “We expect rates to continue a modest upswing.”
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