Mortgage Rates Rise and Home Sales Decline

Bill Prute, the director of the Federal Housing Finance Agency, has weighed in on whether President Donald Trump’s policies have made home ownership more accessible through financial means.

Freddie Mac reported on Thursday that the average rate for 30-year fixed mortgages climbed to 6.86%, up from last week’s rate of 6.81%. This marks the highest level since February 13, when the average stood at 6.87%.

Just a year ago, these rates were at about 6.94%. Moreover, the average rate for a 15-year fixed mortgage increased to 6.01%, a modest rise from 5.92% the previous week. In April of last year, this rate was at 6.24%.

The National Association of Realtors (NAR) also shared that home sales dipped by 0.5%, translating to an adjusted annual rate of 4 million units for last month. Economists had predicted a rise to around 40 million units in resales.

April’s sales figures are the weakest since 2009, spotlighting a sluggish start to the spring sales season, showing a 2% year-over-year drop.

Lawrence Yun, chief economist at NAR, noted that “Home sales have remained about 75% of pre-pandemic levels over the last three years.”

Existing home sales reflect contracts likely signed in February and March. This kind of data can take a little while to catch up with actual market conditions.

Additionally, there’s a correlation between climbing mortgage rates and the rising yields on 10-year U.S. Treasury bonds, influenced by President Trump’s assertive trade policies and Moody’s recent downgrade of the U.S. credit rating from “AAA”.

Even amidst these challenges, Yun pointed out, “We are still in a mild seller’s market overall. However, thanks to the highest inventory levels seen in nearly five years, buyers have more negotiating power now.”