Home buyers are readjusting their budgets, realizing that borrowing costs are unlikely to move down anytime soon.

Mortgage rates continued to climb for the fifth consecutive week, reaching a 7.22% average and a new high for 2024, Freddie Mac reported Thursday. The last time rates rose this high was in November 2023.

“Mortgage interest rates are unlikely to move down soon, especially in light of yesterday’s Federal Reserve announcement—the Fed funds rate was unaltered for the sixth meeting,” says Jessica Lautz, deputy chief economist at the National Association of REALTORS®. “The Fed is holding the line until inflation cools further, which is not helping home buyers.”

At this week’s average, home buyers with a 20% down payment on a typical $400,000 home would likely have a monthly mortgage payment of about $2,176, Lautz says.

“For first-time buyers who are struggling to save for a down payment and closing costs, this is not welcome news for the spring market,” she adds. “Additionally, repeat buyers, who may have a mortgage interest rate in the 2% to 3% range, may be priced out of making a housing move. However, repeat buyers continue to earn housing equity, and that equity may help if they are in a situation where a move is not optional.”

Some buyers may be undeterred by higher mortgage rates, now that they’re in the midst of the spring buying season. They may be more concerned about home prices climbing even higher if they wait. In March, pending home sales climbed to their highest level of the year with NAR reporting a 3.4% uptick in contracts.

Freddie Mac reports the following national averages with mortgage rates for the week ending May 2:

  • 30-year fixed-rate mortgages: averaged 7.22%, up from last week’s 7.17% average. A year ago, 30-year rates averaged 6.39%.
  • 15-year fixed-rate mortgages: averaged 6.47%, rising from last week’s 6.44% average. Last year at this time, 15-year rates averaged 5.76%.