Mortgage rates continue to hover in the mid-6% range, with the 30-year fixed-rate mortgage rising to 6.37% this week, Freddie Mac reports. However, the higher borrowing costs are not affecting all home buyers equally this spring.
Bright MLS Chief Economist Lisa Sturtevant points to a growing divide in the housing market. “Equity-rich, higher-income households are less rate sensitive and are more likely to take advantage of expanding inventory to make a purchase this spring,” she says. “The other group includes first-time buyers and lower-income households who are feeling more economic uncertainty and the strain of rising mortgage rates.”
Economists increasingly describe this as a K-shaped housing market, where activity remains stronger at the higher end while entry-level demand slows under affordability pressure.
Sturtevant also notes that rising rates are influencing who is willing—or able—to list homes this spring. “We are going to see new listing activity driven by those who need to move out of necessity—family or job changes—while discretionary or optional moves will be put off, particularly by those homeowners currently holding sub-4% mortgage rates,” she says.
Higher Rates, Bigger Mortgages
Recent rate increases are prompting some would-be buyers to hold off. Mortgage applications for a home purchase fell 4% last week, though applications remain 5% higher than the same week a year ago, according to the Mortgage Bankers Association.
“The ongoing conflict in the Middle East continues to push rates higher,” says Joel Kan, deputy chief economist at the MBA.
At the same time, still-rising home prices is prompting the average loan size for a mortgage to climb to record highs. The average purchase loan application climbed to $467,300 in the latest week—the highest level in MBA’s survey history dating back to 1990.
“This increase could indicate that potential first-time buyers, and buyers looking for homes at lower price points, might be more hesitant to move forward given the economic uncertainty and higher rates,” Kan says.
Related: Home Prices Surge Again, Despite Affordability Strain
New Doors Are Opening
Buyers may find more opportunities lately in the new-home market.
“Recent data points to slightly better conditions for buyers with a boost in new-home sales, median new-home prices being down to their lowest level since July 2021, and higher inventory than in recent years,” says Sam Khater, Freddie Mac’s chief economist.
He adds that these trends may help “modestly ease affordability pressures” for some buyers during the spring homebuying season.
Sales of newly built single-family homes rose 7.4% in March compared to February and were up 3.3% from a year earlier, the Commerce Department reported earlier this week. Builders cite tight supply in the existing-home market as a key driver of demand for new construction.
The median new-home sales price in March was $387,400, down 6.2% from a year ago and nearly 10% below its most recent peak in December 2025.
By comparison, the National Association of REALTORS® reports the median price of an existing home sold in March was $408,800—about $21,000 higher than the median new-home sales price.
Mortgage Rates This Week
Freddie Mac reports the following national averages with mortgage rates for the week ending May 7:
- 30-year fixed-rate mortgages: averaged 6.37%, up from last week’s 6.30% average. A year ago, 30-year rates averaged 6.76%.
- 15-year fixed-rate mortgages: averaged 5.72%, rising from last week’s 5.64% average. A year ago, 15-year rates averaged 5.89%.
