This week, mortgage charges rose to their highest stage since Could 2024. The typical charge on the 30-year fixed-rate mortgage went up three foundation factors to 7.07% within the week ending Could 29, in accordance with charges offered to NerdWallet by Zillow. A foundation level is one one-hundredth of a share level.

That is the fourth week in a row that debtors have seen elevated mortgage charges. Residence consumers have to be exhausted by the phrase “uncertainty” at this level, however that’s precisely what continues to drive charges increased. 4 months into the second Trump administration, we nonetheless don’t have a transparent image on how tariffs will have an effect on the financial system. And because the GOP’s “big, beautiful” tax invoice threatens to develop the federal government’s deficit, a nervous bond market is nudging charges upwards.

Whereas mortgage charges rise, many would-be dwelling consumers are ready on the sidelines.

Current-home gross sales fell 0.5% from March to a seasonally adjusted charge of 4 million in April, down 2% from the earlier 12 months, in accordance with the Nationwide Affiliation of Realtors’ newest report. Whilst fewer consumers are keen or in a position to chunk, sellers proceed to attain record-breaking costs. The median existing-home sale value hit $414,000 in April, up 1.8% from the identical interval in 2024. This marked the twenty second consecutive month of year-over-year value will increase.

These rising prices have contributed to a rising stockpile of accessible properties as fewer customers can afford to purchase. The typical property remained in the marketplace for 29 days in April, up from 26 days throughout the identical interval in 2024, in accordance with the NAR report, and stock was up 20.8% in comparison with final 12 months.

First-time dwelling consumers are particularly challenged in a troublesome housing market, since they gained’t have fairness from a earlier dwelling sale to assist offset increased mortgage funds. In accordance with latest knowledge from ICE Mortgage Know-how, the typical first-time dwelling purchaser made a $49,000 down cost in March, in comparison with the $134,000 that repeat consumers dropped at the desk.

This makes it all of the extra pleasantly shocking that first-time consumers are literally gaining a stronger foothold: Information from the Nationwide Affiliation of Realtors exhibits them representing 34% of gross sales in April in comparison with 32% the earlier month and 33% the earlier 12 months.

One motive? First-time consumers don’t face the dilemma of giving up a low rate of interest, in comparison with householders who “remain locked in the golden handcuffs of relatively low monthly payments on their existing homes,” mentioned Andy Walden, Head of Mortgage and Housing Market Analysis for ICE.

ICE additionally discovered that Gen Z consumers accounted for one out of 4 first-time dwelling consumers within the first quarter of 2025.

Gen Z consumers comprised over 30% of recent homebuyer exercise in inexpensive markets with fewer monetary limitations to entry, together with Indiana, South Dakota and Kentucky. Comparatively, Gen Z consumers had been much less represented amongst first-time consumers in high-priced markets like Washington, D.C. (11%) and California (13%).