Mortgage rates rose this week from a record low as the benchmark 10-year Treasury yields moved higher.
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Rates
Treasuries rose today after the Bureau of Labor Statistics reported that consumer prices excluding food and energy increased the most in July compared to every month for the past 30 years. Traders and investors took this as a sign that the economy is recovering from the Covid pandemic. Mortgage rates tend to follow the 10-year Treasury.
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The 30-year fixed-rate mortgage raised 2 basis points to 3.24 percent, according to Bankrate’s weekly survey of major lenders. That’s just 2 basis points above last week’s lowest.
“Higher-than-expected inflation readings have boosted bond yields from the tight range of recent weeks. Expect a surge in mortgage rates to follow,” said Greg McBride CFA, chief financial analyst, Bankrate.com.
Elizabeth Rose, sales manager at AmCap Mortgage, in Dallas, said, ‘News of a possible fax, coupled with higher-than-expected inflation numbers and a lot of supply, sent the mortgage bond market up a notch, pushing those rates slightly higher this week. The bond market was forgetting for a correction. The question now is, is this just a temporary correction as the start of a new trend towards higher rates? ”
Meanwhile, the National Association of Realtors reported that median household prices for single-family homes rose in 96 percent of the metro areas it surveyed in the second quarter of a year earlier. This pushed the national median existing single-family home price to $ 291,300, up 4.2 percent from the same quarter a year ago.
“House prices have held up well, mainly due to the combination of very strong demand for housing and a limited supply of homes for sale,” says Lawrence Yun, chief economist at NAR. “Historically low inventory continues to strengthen the price in some areas and even increase.”
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Video: Covid-19 mortgage rates improve faster (CNBC)
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