BUSINESS + ECONOMY

Homebuyers pause as mortgage rates jump

Apr 11, 2024, 2:00 PM

Mortgage rates soar to their highest level in 21 years...

US mortgage rates surged this week to their highest level in 21 years. Newly constructed homes in Queen Creek, Arizona, are pictured here on June 5. Rebecca Noble/Bloomberg/Getty Images

WASHINGTON, D.C. — Mortgage rates have jumped to their highest level since Thanksgiving. Potential homebuyers are pressing pause on applying for new home loans.

The average US interest rate on a 30-year mortgage is 7.01%, according to the Mortgage Bankers Association. In Utah, the average homebuyer would pay a rate of 6.59%, according to Zillow.

That means for a 30-year mortgage loan worth $400,000, Utah homebuyers who lock in the average rate would pay $518,718 in interest. If they bought a home in April 2022, homebuyers in the state would pay less on interest than on the amount they actually borrowed: At about 5% interest, they would fork over $373,023.

Mortgage rates and refinances increase, new applications decrease

As application rates decline, mortgage interest rates are rising. Additionally, refinancing rates are skyrocketing, according to an April 10 report from MBA.

The Association reports the total number of applications increased by 0.1% last week while refinancing grew 10%. 

Refinancing tends to do the opposite, dropping as mortgages go up.  CNBC reports one possible reason for the switch is that homeowners are attempting to freeze their mortgage rate before national rates go up even higher.

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Homebuyers pause as mortgage rates jump