Mortgage Rates Surge Past 7%, Hitting Highest Point Since May

City: Washington, D.C.: So, the interest rate for 30-year mortgages just hit an eight-month high. It’s now at 7.09%, which is the highest we’ve seen since May. This is tough news for anyone looking to buy a home, especially with prices already climbing and not enough houses available.

With these higher rates, buying a home is getting more expensive. And it’s not just buying; renting is also becoming a real strain on people’s wallets. The national median rent has reached $2,000 a month, which is a lot, right?

Plus, rent prices are rising faster than wages, making it even harder for renters to keep up. Housing costs are a big part of inflation, which the Federal Reserve is trying to control by keeping interest rates high.

Last month, the Consumer Price Index went up by 0.4%, and housing costs played a role in that increase. It’s a tough situation for many folks out there.

Experts think mortgage rates will stay above 6% for a while, maybe even until 2026. So, if you’re hoping for a break, it might be a long wait.

Sam Khater from Freddie Mac mentioned that the strong job market is keeping inflation high, which is pushing mortgage rates up. He suggests that buyers shop around for better rates, but it’s still a tough market for many.

There’s also a big shortage of homes. Freddie Mac says we’re short about 3.7 million units across the country. That’s a huge gap!

During a recent hearing, Scott Bessent, who’s set to be the Treasury secretary, talked about how serious this housing crisis is. He said many parents feel like the American dream is slipping away from their kids.

On a brighter note, there’s been a slight increase in housing inventory, with a 17.7% rise from last year. But even with more homes available, many people are still stuck because they locked in lower rates before the Fed started raising them.

So, while there are some signs of hope, the overall picture is still pretty challenging for homebuyers and renters alike.