Mortgage rates kept climbing for the fifth consecutive week, bringing average year-over-year rates 60 basis points higher.
Freddie Mac‘s Primary Mortgage Market Survey, which focuses on conventional and conforming loans with a 20% down payment, shows the 30-year, fixed-rate mortgage averaged 7.57% as of Oct. 12. That’s up 8 basis points from 7.49% the previous week.
By contrast, the 30-year, fixed-rate mortgage was at 6.92% a year ago at this time.
“For the fifth consecutive week, mortgage rates rose as ongoing market and geopolitical uncertainty continues to increase,” Sam Khater, Freddie Mac’s chief economist said in a press release. “The good news is that the economy and incomes continue to grow at a solid pace, but the housing market remains fraught with significant affordability constraints. As a result, purchase demand remains at a three-decade low.”
On Thursday, the Consumer Price Index report showed steady inflation in September, with increases in shelter costs.
Other indices showed significantly higher home loan rates this week.
HousingWire’s Mortgage Rates Center showed Optimal Blue’s average 30-year fixed rate for conventional loans at 7.52% on Wednesday, compared to 7.60% the previous week. At Mortgage News Daily on Wednesday, the 30-year fixed rate for conventional loans was 7.60%, up from 7.70% the previous week.
Last week’s stubbornly strong jobs report surprised investors, resulting in a surge in the 10-year Treasury yield and home loan rates, Hannah Jones, senior economic research analyst at Realtor.com, said in a news release.
On Thursday, the benchmark 10-year Treasury yield was at 4.6%, down from 4.8% earlier in October. Amid geopolitical uncertainty, investors took refuge in bonds, Jones noted.
Additionally, higher mortgage rates are also a result of the Federal Reserve‘s reduced holdings of mortgage-backed securities, Bright MLS Chief Economist Lisa Sturtevant said in a news statement. The Fed’s selloff of MBSs has increased the supply of mortgage bonds in the market, driving those bond yields higher.