Mortgage rates in the United States remain at their highest level since 2008, as they climbed for the second consecutive week amid debt ceiling concerns. According to Freddie Mac, the average rate for a 30-year fixed mortgage increased to 6.57 percent in the week ended May 25, up from 6.39 percent the week before.
Along with the Fed's aggressive rate hikes, mortgage rates have climbed by more than 3 percentage points since the beginning of 2022, 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.
"These numbers are a cruel twist given they arrive just as home prices seem to be drifting back down to earth," Andrea Riquier from Realtor.com said in a statement. “Recent momentum has home prices on a trend to dip below year-ago levels in a matter of weeks,” Danielle Hale, chief economist at Realtor.com added. “But while many homebuyers will certainly welcome a lower price tag, higher mortgage rates may minimize or erase any potential savings.”