Mortgage rates experienced their largest jump in over a month, pushing the 30-year rate above 7%, amid uncertainty about when the Federal Reserve will reduce interest rates.
As of May 30, the 30-year fixed-rate mortgage averaged 7.03%, according to Freddie Mac’s data released on Thursday, marking a 9 basis point increase from the previous week. A basis point is one-hundredth of a percentage point. A year ago, the 30-year rate was 6.79%.
The 15-year mortgage rate averaged 6.36%, up from 6.24% last week and 6.18% a year ago.
Freddie Mac’s weekly mortgage rate report is based on thousands of applications submitted by lenders across the country. Mortgage News Daily reported the 30-year fixed-rate mortgage at 7.34% on Thursday afternoon, while the Mortgage Bankers Association’s survey showed it at 7.05% as of May 24.
Overall, it’s a challenging time to purchase a home due to high interest rates and record-high home prices, limiting affordability for buyers. However, some markets are showing signs of change. Nationwide, the share of home sellers reducing their asking prices reached its highest level since November 2022, according to Redfin. Specifically, 6.4% of homeowners are lowering prices to attract buyers, with Fort Worth and San Antonio, Texas, experiencing the largest annual drops in median home sales prices.
Freddie Mac’s chief economist, Sam Khater, noted that “more hawkish commentary about inflation and weak demand for longer-dated Treasury auctions caused market yields to rise across the board.” He added that “economic indicators have been stagnant in recent weeks, leading to higher mortgage rates as market expectations for interest rate cuts diminish.”