Mortgage rates increased this past week, as last Friday's
The Freddie Mac Primary Mortgage Market Survey ended a streak of four consecutive declines with a 3-basis-point increase for the average 30-year fixed rate, with the average rising to 6.12% for the week of Feb. 9. This is compared with 6.09% for the
"Following an interest rate hike from the Federal Reserve and a surprisingly strong jobs report, mortgage rates increased slightly this week," said Sam Khater, Freddie Mac's chief economist, in a press release. "The 30-year fixed-rate continues to hover close to 6%, and interested home buyers are easing their way back to the market just in time for the spring home buying season."
However, the 15-year fixed had a starker rise more in line with the 10-year Treasury, to 5.25% from 5.14% one week prior, and 2.93% for the
Meanwhile, as of Thursday morning, Zillow's mortgage rate tracker climbed a whopping 27 basis points to cross back above 6%. It now stands at 6.12%, unchanged from Wednesday, but higher than 5.85% reported one week ago.
Black Knight Optimal Blue's product and pricing engine also recorded a big rise in the average for the 30-year conforming loan, to 6.298% on Wednesday from 5.979% for Feb. 2.
Yields on the 10-year Treasury note that mortgage rates are benchmarked to closed at 3.4% on Feb. 2, but zoomed up to 3.53% the next day following the jobs report release. On Feb. 6, they pushed another 10 basis points higher before closing at 3.67% on Feb. 7.
Since then, however, the yield has trended down again, and it was back at 3.6% at 11:50 Eastern time on Thursday morning.
"A stronger-than-expected employment report, the continued unwinding of $95 billion worth of Treasury and mortgage-backed securities each month and more hawkish recent comments by Federal Reserve officials are putting upward pressure on bond yields and the mortgage rates they tend to influence," said Orphe Divounguy, senior macroeconomist at Zillow Home Loans in a statement issued Wednesday night. "A number of Fed officials spoke this week with the same general message: interest rates must go higher and stay high for a few years in order to 'kill inflation.'"
In the near term, even after this week's surge, another shift in direction is highly likely.
"With a slew of leading indicators pointing to a slowing economy, the rapid deceleration of consumer price growth and falling inflation expectations, more aggressive policy tightening could drive the risk of recession higher and pull long-term rates down again," Divounguy said. "Next week's Consumer Price Index report will likely cause more policy uncertainty and higher mortgage rate volatility."
