Instant Reaction: Mortgage Rates, May 2, 2024

At 7.22%, the 30-year mortgage interest rate has hit its highest point since November 2023. Mortgage interest rates are unlikely to move down soon, especially in light of yesterday’s Federal Reserve announcement—the Fed funds rate is unaltered for the 6th meeting. The Fed is holding the line until inflation cools further, which is not helping home buyers.

For a $400,000 home with a 20% down payment, the typical monthly mortgage payment would be $2,176. 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. Additionally, repeat buyers, who may have a mortgage interest rate in the 2-3% 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.