Mortgage interest rates hit a seven-year high this week when the average 30-year fixed mortgage rate increased from 4.61% to 4.66%, its highest level since May 2011. Interest rates started at 3.95% at the beginning of the year and had a recent low of 3.78% last September, USA Today reports.
Home sales have already started to slow, something that analysts have attributed to both the rising rates and a low housing supply. Existing home sales dropped 2.4% last month and were 1.4% lower than where they were in April of last year. Interest rates are expected to rise to 5% for a 30-year fixed rate mortgage by the end of the year.
Despite the declining number of home sales, the homes that are available for sale are being purchased quickly. Homes stayed on the market for an average of 26 days in April, marking the shortest time frame since the Nation Association of Realtors started tracking the data in 2011.