Mortgage rates in the United States continued their steep climb last week, adding to the woes of would-be home buyers that are already facing historically high prices and steep competition in the tight housing market. According to Freddie Mac, the average rate for a 30-year fixed mortgage jumped to 5.27 percent in the week ended May 5, marking the highest level since 2009.
Mortgage rates have already climbed by more than 2 percentage points this year, threatening to push more and more potential buyers out of the market, especially as high rents and other costs of living make it increasingly difficult to save for a significant down payment.
“After nearly three years of mortgage rates under 4%, a new reality has emerged for homebuyers,” Joel Berner, Senior Economic Research Analyst at Realtor.com said in a statement. “Not only are listing prices at an all-time high, financing a home purchase has gotten significantly more expensive. With much higher monthly payments, buyers who don’t have savings for a large down payment risk being priced out of the market.”