M
ortgage rates continued to rise for the third consecutive week, fueled by ongoing market volatility. The average 30-year fixed-rate mortgage now stands at 6.89%, according to Freddie Mac's latest data. This increase has led to a decline in borrower demand, with both refinance and purchase applications experiencing drops last week.

    The housing market has been stagnant this year, with sales of previously-owned homes fluctuating between January and March. However, the spring selling season has turned out to be disappointing, with April sales reaching their slowest pace since 2009. The National Association of Realtors reported that only 4 million homes were sold last month, a decline from the 4.06 million mark achieved in 2024.

    Home contract signings also plummeted by 6.3% in April, indicating that sales in May and June are likely to be lower as well. This trend is attributed to homeowners holding off on listing their properties due to concerns about taking out new loans with higher interest rates.

    Despite the market's challenges, there is a glimmer of hope: the "mortgage rate lock" phenomenon has thawed more quickly than expected. However, sellers may still be overestimating the value of their homes, as the typical home for sale is listed at a record high $469,729, while selling for an average of $431,057. This disparity suggests that buyers have the upper hand in negotiations.