Mortgage rate trends: Home prices just dropped by the biggest amount since 2012, but a looming threat could ‘erase any progress’ toward a healthier market

For now, the less competitive housing market could open doors for some buyers, an economist says.

After bouncing back and forth for weeks due to conflicting economic indicators, the average mortgage rate has climbed back up to 6.39%, according to Freddie Mac.

“The economy remains on fragile footing, and a U.S. default would cause an interest rate spike that could erase any progress towards a healthier housing market by cutting deeper into home sales,” says Hannah Jones, economic research analyst at

President Joe Biden is currently looking to lift the $31.4 trillion debt ceiling in order to avoid a default, but Jones says the longer the ceiling goes without a raise, the more likely Americans will be affected by higher interest rates.

“The sooner the debt impasse is resolved, the less likely it is to negatively affect households already plagued by high prices.”


Source: | By Serah Louis