Housing in the US: Mortgage rates hit 7% and renters feel squeezed
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Why are mortgage rates suddenly above 7% and what does that mean for homebuyers?
It's consider this where every day we go deep on one big news story. Today, housing affordability. If you are looking to buy a house or rent a place to live, you are probably feeling squeezed right now.
Rents are rising. We see wages are stagnating or maybe not increasing as much as the cost of living is.
That's Julia Ordunia from Texas Housers. They advocate for affordable housing.
People are trying to decide where the dollar, where the dime goes, and what are costs they can actually minimize to be able to make the costs that are fixed like rent.
And it's not just renters. People looking to buy homes are facing a pricey new reality. 7% interest rates on a 30-year mortgage, the highest in more than a year. Consider this, for a lot of people housing is very expensive. We take a closer look at what's going on and why it matters. From NPR, I'm Scott Detroit.
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Some of these uh ads are gonna be ugly and it's gonna be a pretty negative campaign. That's the nature of a midterm when you got a an environment like the one that the Republicans are facing.
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How did the war in Iran and oil prices trigger a jump in mortgage rates?
This week on the NPR politics podcast.
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It's consider this from NPR. If you have been waiting for homes to get more affordable before buying, you are going to have to keep waiting. Mortgage rates for a standard loan are now more than seven percent for the first time in well over a year. Here to tell us what that means for home buyers is NPR Steven Basaja. Hey Steven. Hey Scott, hope you're not planning on moving anytime soon. Not anymore for sure. I mean what
what is going on here?
What would a 7% mortgage cost a typical buyer compared to a 6% loan?
Yeah, well you know, these rates they are rising fast. The most common type of mortgage is the thirty year fixed rate mortgage. Two weeks ago the national average was about six and three quarters of a percent for the interest rate. Today it's up more than a quarter of a percent. So by mortgage rate standards, that is a sharp jump. So what do we think happened to cause such a big jump? Okay, stop me if you've heard this one before. It goes back to the US war against Iran. The war has played a big part in driving up mortgage rates by driving up the cost of oil and with it inflation. Inflation concerns go up, bond yields go up, and mortgage rates tend to follow. And remember, the bond market influences borrowing costs all across the economy, including for homes.
There's also a bunch of other factors hitting the bond market like all at once right now. Run through a few of those for me. Well, you got like tech companies issuing their own bonds to pay for data centers and AI. Investors are buying up those instead of government bonds. You also had the Federal Reserve raise their benchmark interest rate last week about a quarter of a percentage point. That's a pretty modest move, but some of the Fed's policymakers are signaling more hikes could be on the way. Investors do not love that.
How do higher rates affect borrowers with lower credit scores?
And underneath all this is still stubbornly high inflation. I did speak with Joel Connelly. He's an economist with the Mortgage Bankers Association. He says all these factors contribute to higher rates and really squeeze home.
Buyers. If they want to buy, that adds a lot to their monthly payment. Also prevents some borrowers from qualifying for their mortgage because of this higher expected payment. And it also slows down home sales.
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Chapters
8 chapters
1
Why are mortgage rates suddenly above 7% and what does that mean for homebuyers?
0:00–1:22
2
How did the war in Iran and oil prices trigger a jump in mortgage rates?
1:22–2:39
3
What would a 7% mortgage cost a typical buyer compared to a 6% loan?
2:39–3:48
4
How do higher rates affect borrowers with lower credit scores?
3:48–5:04
5
What does the new Urban Institute study reveal about renters struggling to pay rent?
5:04–6:12
6
Why are middle‑income renters feeling the biggest squeeze right now?
6:12–7:51
7
Are rising rents and fees leading to more evictions among higher‑income tenants?
7:51–9:12
8
What solutions are experts and housing advocates proposing to ease the squeeze?
9:12–10:25
Speakers
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