Mortgage rates surged Monday following Moody’s decision to downgrade US credit ratings after weeks of sitting stagnation.
Bond yields rose after the announcement later on Friday, with mortgage rates roughly following the 10-year Treasury yield.
The average rate for popular 30-year fixed loans reached 7.04% on Monday, according to Mortgage News Daily. That’s the highest level since April 11th.
“The average mortgage lender had to explain not only the Friday closure, but also the additional weaknesses we’ll be seeing this morning.
The April surge in mortgages had a direct impact on the housing market, and was pulled back quickly in the heart of the spring season, usually in the spring season. Pending sales of existing homes in April, counted by signed agreements, fell 3.2% compared to last April, according to Realtor.com.
Home builders also noted that demand fell sharply in April. According to the National Association of Home Builders’ Monthly Index, Homebuilder Sentiment is at its lowest level since the end of 2023.
According to the weekly index of the Mortgage Bankers Association, demand for mortgages from home buyers revived a bit in the first two weeks of May, when the fees were sitting at around 6.9%. There has been a significant slowdown among buyers recently whenever the rate exceeds that 7% threshold. Plus, some people have even qualified for a mortgage anyway.
