Mortgage Rates Hit New Highs, Dampening Spring Homebuying as Buyers Face Stiff Competition

• Mortgage rates rose to 6.77% last week, the highest level since August 2022, following strong economic data • Rates are climbing because the economy remains hot, with inflation slowing less than expected and strong employment growth • Higher rates may slow the spring homebuying season, with mortgage applications down in over half of states • Homebuilders are more optimistic rates may decline further, which could spur more buyer demand • Buyers may find more eager competition this spring as rates, while still high historically, are better than last fall