Average mortgage rates drifted higher this week due to concerns about an inflationary impact from the government’s latest stimulus measures. The increase comes despite the Federal Open Market Committee’s assurance that it will not raise financing costs
The average rate for a 30-year fixed mortgage climbed to 3.09% from 3.05%
The rate-indicative 10-year Treasury yield had climbed above 1.7% at deadline early Thursday, a high not seen since January 2020. It started the week hovering near 1.6%.
“Yields and rates keep rising even as the Federal Reserve holds firm on its messaging that it has no plans to raise benchmark interest rates or slow their program of bond purchases,” Matthew Speakman, an economist at Zillow, said in a statement about the rate change.
“With the economy showing signs of improvement, the Fed finds itself in the unenviable position of having to delicately cultivate a message that expresses ongoing support for markets while also affirming that it will rein in potential,” he added.
The increase in mortgage rates has been more gradual than that seen in the Treasury yields and loan activity has only subsided slightly to date.
“The
The slight reduction in mortgage application volume appears may have one upside:
“Time to close all loans decreased to 53 days in February, down from 58 days in January,” ICE Mortgage Technology noted in its monthly Origination Insights report.
But timelines haven’t snapped back to pre-pandemic levels yet. In February 2020, it took just 43 days to close a home loan.