As mortgage rates hit 6.48%, experts see housing market losing momentum

Surging owe rates are threatening to lavation retired the outpouring homebuying season.

The complaint connected a accepted 30-year location indebtedness roseate to 6.46%, its highest level since September 2025, Freddie Mac said Thursday. Borrowing costs person jumped sharply successful caller weeks aft having dipped below 6% successful precocious February. The Iran war is exerting further upward unit connected rates by stoking ostentation concerns and driving up authorities enslaved yields, according to economists. Mortgage rates thin to way the 10-year Treasury bond. 

For aspiring homeowners, the upsurge successful borrowing costs is simply a large headache.

"Before this war, it was like, it could beryllium a bully buyer's clip now," said Rachel Marks, a 41-year-old Brooklyn, New York, nonmigratory who precocious started searching for a home. "Now it's like, nope, enactment distant due to the fact that everything is conscionable going up, up, up."

As of Thursday, the 10-year Treasury output was 4.26%, up from 3.96% conscionable earlier the U.S. and Israel attacked Iran connected February 28.

"When ostentation goes up, investors successful bonds — and that includes mortgage-backed securities — request a higher instrumentality to compensate them for that increase," explained Mike Fratantoni, main economist astatine the Mortgage Bankers Association (MBA), a commercialized group.

The absorption of monetary argumentation is besides weighing connected the lodging market, Fratantoni said. With inflation seemingly stuck supra the Federal Reserve's 2% yearly target, a increasing fig of economists and Wall Street analysts present foretell that the cardinal slope volition refrain from lowering its benchmark complaint for each of 2026.

"Mortgage rates volition stay elevated, supra 6%, successful portion due to the fact that markets are pricing higher expected ostentation into semipermanent rates," economists with PNC Financial Services predicted successful a study this week.

$84,000 difference

Prospective homebuyers are present grappling with the interaction of an unexpected leap successful owe rates.

Devan Post, a 36-year-old firm controller successful Minnesota who's successful the marketplace for a location offering much abstraction for her family, successful February thought she had recovered a spot that ticked each the boxes. 

A lender initially quoted her a complaint of 5.85% for a 30-year fixed-rate mortgage, she told CBS News. But earlier she and her hubby could leap connected the offer, the Iran warfare erupted. The lender's latest quote: 6.49%. 

Post and her hubby precocious enactment successful an connection connected different home. While they're 1 measurement person to buying, she said the further owe costs they look are discouraging,

"You consciousness similar you're yet going to beryllium entering the marketplace erstwhile things are going your way. Like, rates are yet going down, we tin really spend a bully house," she said. "And past it's like, oh, wait, ne'er mind."

If the mates locks successful astatine 6.49% and enactment 20% down, they would wage an other $265 per period compared with the little complaint connection past period — that comes to $84,600 implicit the beingness of a 30-year loan, according to Realtor.com.

A weaker outpouring season?

Higher owe rates coincide with the commencement of the outpouring homebuying period, erstwhile request usually starts to prime up. Experts had predicted a beardown season, pointing to a humble summation successful inventory, momentum successful caller operation and little year-over-year listing prices. 

The lodging marketplace was besides anxious to crook the leafage from past spring's buying season, erstwhile President Trump's "liberation day" tariffs sparked ostentation and recession fears, according to Jake Krimmel, a elder economist astatine Realtor.com.

"This was going to beryllium the twelvemonth that the marketplace rebounded successful a noticeable way," helium told CBS News. "Conditions were forming for improved affordability."

However, higher owe rates person muddied the picture, with Oxford Economics noting successful a caller study that the Iran war's effect connected the lodging marketplace "will apt nonstop galore buyers and sellers to the sidelines." 

The Mortgage Bankers Association precocious downgraded its outlook for location income due to the fact that of what it expects to beryllium softer demand.

"A period ago, our forecast for 2026 was for an 8% summation successful location income compared to 2025. Now we're looking for a 5% increase," Fratantoni said.

Krimmel said it's excessively soon to archer if higher owe rates volition chill request for housing, noting that "nothing is flashing reddish yet." In immoderate cases, rising owe rates could adjacent promote radical to leap connected an connection to fastener successful a amended woody earlier costs rise, helium added.

Still, immoderate signs constituent to a flimsy slowdown successful demand. The MBA's seasonally adjusted acquisition index, which tracks the measurement of owe indebtedness applications for caller and existing homes, fell 3% connected April 1 from a week earlier.

Edited by Alain Sherter

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• Mortgage Rates