Mortgage Rates Soar to Near Three-Year High Amid Inflation Fears
The US mortgage market has seen its largest weekly increase in about four years, with the interest rate on the most common home loan jumping to a nearly three-year high. The rate on a 30-year, fixed-rate mortgage now averages 7.28%, up from 7.03% just last week, according to data from Freddie Mac.
This surge is largely due to rising government bond yields, which have been driven higher by stronger-than-expected US economic growth and persistently high inflation. The yield on the 10-year Treasury note has hit its highest level in nearly a quarter century, and investors expect at least one more interest rate hike from the Federal Reserve this year to combat inflation.
The Mortgage Bankers Association also reported another decline in mortgage application volumes, citing the impact of rising rates on affordability and borrower demand. MBA President and CEO Bob Broeksmit noted that mortgage rates have increased for six straight weeks, putting pressure on both homebuyers and homeowners looking to refinance.