Mortgage rates cross back over 7% after U.S. credit downgrade

Mortgage rates reached a near 11-year high after the U.S. credit rating was downgraded to investment grade by Moody's. The surge followed a sharp drop in bond yields earlier in the week, with the 30-year fixed loan rate hitting 7.04% on Monday—a level not seen since April 2023. Experts noted that this unexpected jump was due to market adjustments for both Friday's decline and today's weakness. Meanwhile, the housing market showed resilience in early May as rates were still around 6.9%, but buyer demand has slowed recently with rates exceeding 7%. Homebuilder sentiment also hit a multi-year low following the downgrade, highlighting the ongoing impact on the real estate sector.