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U.S. mortgage rates are back at their highest level since last summer, frustrating homebuyers waiting for a break from some of the steepest borrowing costs in more than a decade.
Home sales have shown signs of a rebound in recent months, but those gains have come despite costlier financing, a weight economists say is continuing to drag on a full-fledged housing recovery.
“It’s certainly not good news for homebuyers when mortgage rates get bumped up,” said Lawrence Yun, chief economist at the National Association of REALTORS®. Sales have started to gain some more momentum in the past few months as buyers and sellers run out of patience waiting for lower rates and come to the market regardless, Yun said.
Adding to the pain, mortgage rates have grown more expensive compared with other borrowing costs than usual-a change driven by shifts in Wall Street’s appetite for investing in mortgage debt.
Rates could come down a bit if this extra expense, or spread, falls in 2025, Yun said.