Mortgage rates jump back to 2001 levels

Why is housing affordability so bleak right now? This here chart tells the story.

Driving the news: The rate on the 30-year-mortgage ticked up to 7.16% this week — back to the high last reached in October last year. Before that you'd have to go back to 2001 to find mortgage rates this high.

Zoom in: A calculation from ING's Chief International Economist, James Knightley, illustrates the issue.

• With a 7.16% mortgage rate, the monthly payment on a $417,200 loan (that's the average mortgage amount taken out last week) works out to $2,820, he says. But at the prevailing mortgage rate back in 2021, you'd pay that amount for a $670,000 loan.
• Households that would like to move "are trapped right now," he writes.

💭 Our thought bubble, via Axios' Felix Salmon: At this point mortgage rates are so high they're almost a reason to buy, on the grounds that they have to come down at some point — and when mortgage rates come down, prices go up.