Mortgage rates rose back above the 3% mark, hitting the highest level since April, over the past week.
The 30-year fixed-rate mortgage averaged 3.05% for the week ending Oct. 14, up six basis points from the previous week, Freddie Mac
reported Thursday. The high point this year for the benchmark mortgage product came in April when the rate on 30-year loans peaked at 3.18%.
The 15-year fixed-rate mortgage increased seven basis points to an average of 2.3%, while the 5-year Treasury-indexed hybrid adjustable-rate mortgage rose by three basis points to an average of 2.55%.
The increase in interest rates occurred this week “despite the downward trajectory of the 10-year Treasury yield
as investors reacted to higher-than-expected inflation and more than 10 million unfilled job openings,” said George Ratiu, manager of economic research at Realtor.com.
Inflationary concerns persist across the economy — and runaway housing costs are a major factor behind the rise in consumer prices in recent months. Even with last week’s somewhat disappointing jobs report for September, the Federal Reserve has enough ammo to move forward with its plan to begin tapering its asset-purchase program that’s been in place since the start of the pandemic, said Zillow
Vice President of Capital Markets Paul Thomas.
“Economic data coming later this week — such as the Producer Price Index and Retail Sales — will provide additional signals on inflation and economic recovery, both of which may have an impact on rates in the coming week,” Thomas said.
The positive news for home buyers in the market right now is that the inventory situation is much improved from earlier this year, which should help to temper the breakneck pace of home-price growth seen over the spring and summer.
“It seems that buyers and sellers are finally taking a step back from the pandemic-induced stampede of the past year to regain their footing and reassess their next steps,” Ratiu said.
Still, anyone looking to buy will need to factor spending an additional $125 each month due to the increase in mortgage rates, Ratiu said. And with affordability always front of mind, especially for first-time home buyers, higher monthly mortgage payments could cause even more Americans to get cold feet about purchasing property.