US mortgage rates jumped for a fourth consecutive week, reaching 6.38% and marking the highest point in six months. This surge in rates is dampening prospects for the crucial spring season as the Iran war continues to roil markets.
The average rate for 30-year, fixed loans has climbed to 6.38%, the highest since September, according to data from Freddie Mac. Borrowers with a $1 million loan would pay approximately $6,242 a month at the current rate, excluding insurance and taxes.
With the key spring selling season about to begin, the spike in rates adds another reason for buyers to hesitate, compounding worries about the high cost of living and job security. Home builders are already showing signs of concern, with KB Home lowering its full-year guidance for closings, citing the Iran war as a contributing factor.
Despite borrowing costs being below last year's average, the gap is shrinking. Signs of a weak housing market were visible even before the conflict erupted, with home prices in February showing little change from January.
However, the weak market could give some buyers negotiating power, as long as they have the income and fortitude to plow ahead. Redfin Principal Economist Sheharyar Bokhari notes that homebuyers in many markets are having success asking for discounts and other concessions due to the lack of competition.
