Mortgage rates hit their highest point since 2000

Mortgage rates soared to the highest level since November 2000, crushing affordability for potential homebuyers.The average on the 30-year fixed last year at this time was around 5.5%.driven by investors' concerns that high interest rates and inflation will linger longer than expected.

The average rate on the popular 30-year fixed mortgage hit 7.48%, the highest level since November 2000, according to"Investors just aren't seeing the kind of deterioration in economic data that they expected," said Matthew Graham, chief operating officer of Mortgage News Daily.He noted that the Federal Reserve wants to see the same deterioration before considering a policy shift, and that shift would likely favor short-term rates first.

Higher rates are hitting potential homebuyers hard, adding insult to the injury of pandemic-inflated home prices. Rates set more than a dozen record lows in 2020, setting off a homebuying spree that caused prices to rise over 40% from the start of the pandemic to the summer of 2022. Prices pulled back slightly at the end of last year but are now rising again due to still-strong demand and very lean supply.

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