US Mortgage Rates Near 7% Threaten to Freeze Housing Market

The average interest rate on a 30-year mortgage in the US is approaching 7%, up from around 3% in 2021. The 400-basis-point jump means homeowners looking to move face much steeper monthly costs.

For a $500,000 home with 20% down, the monthly payment rises from $1,686 at 3% to $2,661 at 7% — an increase of nearly $1,000, or 58%.

With affordability stretched and existing homeowners locked into low rates, activity in the housing market is slowing. The already stagnant market may grind to a halt as potential buyers retreat.