Mortgage Rates Surge Above 7% Amid Inflation, Bond Market Pressure

Mortgage rates in the U.S. have risen again, surpassing 7% following Moody's downgrade of the U.S. credit rating, reaching the highest closing level in over three months due to weak Treasury auction results and ongoing congressional budget debates that suggest increased spending. The bond market's negative reaction to these events has put upward pressure on mortgage rates, with the average rising to 7.08%. Meanwhile, in the UK, rising inflation driven by significant April price hikes in taxes and utilities is expected to halt interest rate cuts, which in turn will likely push mortgage rates upward. Rental and house prices in the UK continue to climb, with average rents increasing by 7.4% and house prices rising by 6.4% annually, reflecting strong demand and price growth despite regional variations. These combined pressures from inflation, government spending concerns, and market reactions are creating a challenging environment for both renters and prospective homebuyers in the U.S. and UK.