Average long-term US mortgage rate hovers near 7%

The average long-term U.S. mortgage rate rose again this week, a setback for prospective buyers just as the spring homebuying season gets underway.

The average 30-year fixed loan was 7.08% as of April 10, according to Bankrate's latest survey of large lenders. Rates are slightly higher now compared to the start of 2024.

When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford at a time when the U.S. housing market remains constrained by relatively few homes for sale and rising home prices.

A monthly mortgage payment at the current rate would be around $2,063, Bankrate said. The number is based on the U.S. Department of Housing and Urban Development’s national median family income for 2023 at $96,300, and the median price of an existing home sold in February at $384,500, according to the National Association of Realtors (NAR). 

With a 20% down payment and a 7.08% mortgage rate, a monthly payment of $2,063 amounts to 26% of the typical family’s monthly income.

Rates have been mostly drifting higher in recent weeks as stronger-than-expected reports on employment and inflation have stoked doubt among bond investors over how soon the Federal Reserve will move to lower its benchmark interest rate. 

The central bank has signaled that it expects to cut its short-term rate three times this year once it sees more evidence of cooling inflation.

FILE - An aerial view shows homes and apartments in a neighborhood in El Paso, Texas, on December 19, 2022. (Photo by PATRICK T. FALLON/AFP via Getty Images)

Average long-term mortgage rates in 10 largest US metro areas

Los Angeles currently has the highest average 30-year mortgage rate at 7.56%, followed by the Dallas and San Francisco metropolitan areas, both at 7.27%.

This story was reported from Cincinnati. The Associated Press contributed.