Mortgage rates reach highest level in more than a decade

(CNN) — Mortgage rates continued to rise this week, reaching their highest level in more than a decade.

The 30-year fixed-rate mortgage averaged 5.11% in the week ending April 21, up from 5% the week before, according to Freddie Mac. It is the seventh consecutive week of increases and is significantly higher than the 2.97% average this time last year.

“While springtime is typically the busiest home buying season, the upswing in rates has caused some volatility in demand,” said Sam Khater, Freddie Mac’s chief economist. “It continues to be a seller’s market, but buyers who remain interested in purchasing a home may find that competition has moderately softened.”

Buyers have been scrambling to get a home before rates rise too much. Those who weren’t able to lock in a lower rate are finding themselves unable to afford the much higher payment on today’s homes, said George Ratiu, Realtor.com’s manager of economic research. That is starting to show in the sales numbers, with March’s existing home sales down 2.7% from February even as prices hit an all-time record.

More affordable, entry-level homes are also harder to find because there are so few on the market compared with demand. The combination of tight inventory and rising rates is taking a toll on sales in the middle of the market, too, he said.

“With the cost of financing a home about 40% higher than a year ago, demand for homes is visibly cooling, as many first-time buyers find themselves unable to qualify for a mortgage on a home that meets their needs,” Ratiu said.