The Mortgage Bankers Association reported Wednesday that the 30-year fixed-rate conforming mortgage averaged 7.42% in the week ended April 25, up 9 basis points week-over-week and the highest since November 2023. The 15-year fixed eased lower to 6.71%, while the 30-year jumbo rate hit 7.36%. Refinance applications dropped 14% week-over-week, while purchase applications fell 6% — the steepest weekly decline since January.
Behind the jump in mortgage rates is the parallel rise in the 10-year Treasury yield, up 35 basis points since the start of April amid sticky inflation and a hawkish FOMC tone. The mortgage-Treasury spread widened to 305 basis points, well above the historical norm of 170-180 basis points, reflecting capacity-constrained mortgage-backed-securities investors and elevated prepayment risk in 2024-vintage origination.
Affordability at Multi-Decade Low
NAR data shows that the median U.S. home price stood at $407,400 in March, up 4.2% year-on-year. Combined with the 7.42% mortgage rate, the principal-and-interest payment on a 20%-down median home is now $2,267 per month, equal to 39.4% of the median household income — the highest ratio since the early 1980s. Atlanta Fed's Affordability Monitor index registered 71.2, well below the 100 affordability threshold.
Active inventory has finally been climbing: total active U.S. listings stand at 1.04 million, up 28% year-on-year per Realtor.com data, with the months-of-supply ratio at 4.2 — the highest since 2018. New-home builders have responded with rate buy-downs, mortgage credit packages, and price reductions. D.R. Horton (DHI), Lennar (LEN), PulteGroup (PHM), and Toll Brothers (TOL) have collectively guided to 2026 deliveries down 5%-9%.
Real Estate Equity Reaction
The SPDR S&P Homebuilders ETF (XHB