US 30-year mortgage rates have hit 7.29%.
On Wednesday, the average 30-year fixed mortgage rate reached 7.29 percent, the highest level since November, as reported by Mortgage News Daily.
This increase followed the release of new consumer price index inflation data for March, which slightly exceeded economist expectations. The data raised concerns that the Federal Reserve might postpone anticipated interest rate cuts in 2023.
Mortgage rates have climbed significantly since the beginning of 2022, closely tracking the rising interest rates established by a committee of Fed officials. The central bank raised borrowing costs from near-zero in March 2022 to a range of 5.25 percent to 5.5 percent last July, maintaining steady rates in subsequent meetings.
According to the daily mortgage index, the average 30-year fixed mortgage rate peaked at 8 percent in October. Mortgage rates dropped below 7 percent in December after the Fed indicated several interest rate cuts in 2024, but they have risen again as new economic data suggests the battle against inflation has reached a plateau.
A series of economic indicators, including still-elevated price levels, employment figures, and growth data, has pushed back the timeline for cuts in borrowing costs. New government data released Wednesday showed a 3.5 percent increase in inflation from a year ago in March.
High mortgage rates have had a significant impact on homebuyers, especially first-time buyers. To mitigate high borrowing costs, more than one-third of homes were purchased in all-cash transactions in February, and the median down payment increased by 24.1 percent from a year ago, according to a recent report from real estate firm Redfin, making it challenging for buyers who cannot afford these options.
