Mortgage rates shot up 10 basis points this week to a 2023 high as the 10-year Treasury broke through the 4% ceiling for the first time since March, Freddie Mac said.
Its Primary Mortgage Market Survey put the 30-year fixed rate loan at 6.81% as of July 6, up 10 basis points from the prior week’s 6.71%; for the same week last year it was 5.3%.
“Mortgage rates continued their upward trajectory again this week, rising to the highest rate this year so far,” said Sam Khater, Freddie Mac chief economist in a press release. “This upward trend is being driven by a resilient economy, persistent inflation and a more hawkish tone from the Federal Reserve.”
The Mortgage Bankers Association’s Weekly Application Survey released earlier on Thursday also showed a 10 basis point increase in the conforming 30-year fixed-rate mortgage, but that was for the week ended June 30.
The 15-year FRM averaged 6.24%, up 15 basis points from last week’s 6.06% and 179 basis points over the 4.45% average one year ago.
Zillow’s rate tracker reported the 30-year FRM at 6.75% as of Thursday morning, up 25 basis points from an average 6.5% for the prior week
Meanwhile, the 10-year Treasury, which closed on June 29 at 3.71%, closed on July 5 at 3.95%. By 11:30 a.m. on June 30, it was at 4.08%, the highest point since March 9, when it was at 4.02% during the trading day. The last time the 10-year closed above 4% was March 2 at 4.07%.
“Strong economic data continued to keep mortgage rates up this last week, as price pressures seem slow to dissipate,” said Orphe Divounguy, senior macroeconomist at Zillow Home Loans, in a statement issued Wednesday night. “The upward revisions to first quarter GDP showed impressive increases in consumer spending, while rising construction spending points to a resilient U.S. economy.”
Upcoming reports on the movement in wage growth and Friday’s jobs data will also affect mortgage rates, Divounguy said.
“In light of declining labor productivity growth, lower wage growth would suggest inflation could be headed in the right direction,” Divounguy said. “Cooling inflation and a general economic slowdown would put downward pressure on long-term interest rates like the 10-year Treasury yield and in turn, mortgage rates.”
Source: nationalmortgagenews.com