Mortgage Rates Top 5%, Highest in Over 6 Years

Mortgage rates courtesy of Mortgage New Daily (MND)

At the start of 2022, the MND average survey rate on 30-year fixed-rate mortgages was 2.76%. 

This week, the MND average survey rate on 30-year fixed-rate mortgages topped the 5% mark for the first time since November 2018.

Historically, 5% is not that high of a rate. But relative to home prices it's an enormous rate, especially for first-time buyers.

Case-Shiller Home Price Index

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Case-Shiller home price data via St. Louis Fed, chart by Mish

Kicking off 2022, the Case-Shiller home price index continues the record pace of 2021.

For details, please see 2021 Set New Annual Records for Home Prices. 2022 Continues the Trend.

Existing Home Sales Dive 7.2 Percent Wiping Out January's Big Month

That decline was for February and most February sales were made in December or January when mortgage rates were mush lower. 

At the end of January, the 30-year mortgage rate was about 3.68%. On March first the rate was 3.90%. On April 5, the rate was 5.02%.

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Lumber futures courtesy of Nasdaq

Expect a Huge Housing Slowdown 

Lumber futures have pulled back from recent highs but remain very elevated. That will resolve to the downside soon. 

And the pending housing slowdown will impact demand for furniture, appliances, paint, landscaping, cabinets, etc.

Recession on the Horizon

The Fed does not see it, but a recession is on the horizon.