30-year fixed mortgage rates in the U.S. are back above 7% It’s getting more expensive for Americans to take out a mortgage to buy a house again. The 30-year fixed mortgage rate has risen from 6.97% last week to 7.12%, the highest level since May 2024. For example, borrowing $400,000 over 30 years at a 6% interest rate means paying about $2,398 per month. At 7.12%, that monthly payment jumps to $2,694—an extra $3,500 a year. And that’s just the principal and interest paid to the bank, not including property taxes and insurance. If salaries don’t increase but monthly payments to the bank go up, people will have to cut back elsewhere. Some might eat out less, travel less, delay buying a new car or appliances, or even put off buying a house altogether. As more people do this, businesses could see fewer customers, leading to lower revenues. Fewer home purchases don’t just affect sellers. Moving companies, contractors, furniture and appliance retailers could all see less business. If new homes remain hard to sell, developers might build fewer houses, impacting construction workers and building material suppliers. Companies might not lay off employees immediately, but they could freeze hiring or cut overtime, meaning workers might earn less. This is why the earlier PMI report showing businesses are doing okay and this news about rising housing costs can coexist. As long as jobs are stable and wages are rising, some families can still manage. But if jobs become harder to find, wages stagnate, and mortgage rates stay this high, fewer people will buy homes or spend money, making it even tougher for businesses. The economy could keep getting worse. A mention to @Gate—trade more markets.