Mortgage rates hit 7-year high as ultra-cheap era ends

"Mortgage rates this week jumped to their highest level since 2011, signaling a shift from a period of ultracheap loans to a higher-rate environment that could slow home price appreciation and squeeze first-time buyers," The Wall Street Journal's Laura Kusisto and Christina Rexrode write (subscription):

Be smart: "A one percentage point increase in [mortgage] rates can lead to a reduction in home sales of 7% to 8%."

• What happened: "The average rate for a 30-year fixed-rate mortgage rose to 4.61% this week from 4.55% last week."
• How it happened: "The spike this year has been faster than many economists predicted as a surging economy, the prospect of wage gains and a steep rise in prices for commodities such as lumber and gasoline stoke inflation worries."
• Why it matters: "The jump this year reflects an abrupt departure from a long period of declining rates that began during the financial crisis. Rates bottomed out in late 2012 at 3.31%."
• The fallout: "The concern among economists is that higher rates will prompt homeowners to keep their low-rate mortgages rather than trade up for better properties. As rates approach 5%, the risk of the phenomenon known as rate lock grows."