Mortgage Rates Inch Towards 7%, Threatening Spring Home Buying Frenzy

This week, mortgage rates inched closer to the 7% mark, exacerbating the already pressing issue of housing unaffordability, which threatens to overshadow the usual spring homebuying rush.

According to Freddie Mac's latest Primary Mortgage Market Survey released Thursday, the average rate for the 30-year fixed mortgage reached 6.9%, up from 6.77% the previous week. A year ago, the average rate for the 30-year loan stood at 6.50%.

Similarly, the rate for the 15-year fixed mortgage rose to an average of 6.29% this week, compared to 6.12% last week. One year ago, the rate for the 15-year fixed mortgage averaged 5.76%.

Typically, spring witnesses increased buying activity following a slower winter period. However, the combination of elevated rates and soaring home prices has put a damper on the housing market, causing more potential buyers and sellers to either be priced out or reconsider their plans to move.

"Recent surges in new listing activities suggested that we might have a busy spring ahead," said Realtor.com Economist Jaiyi Xu. "However, the recent increase in mortgage rates has the potential to slow the market by disrupting the plans of many buyers, especially in a market where a significant number of consumers are anticipating lower mortgage rates, not higher."