Mortgage rates headed upward for the fifth straight week, continuing their first-quarter trend, as the latest economic data and central bank news did little to stop its trajectory.
The 30-year fixed-rate mortgage climbed 5 basis points to average 4.72% for the weekly period ending April 7, according to Freddie Mac’s Primary Mortgage Market Survey. Although the latest weekly average was up, the pace of increase was muted compared to late-March movements, which had the 30-year rate jumping by over 50 basis points.
Seven days ago, the 30-year rate came in at 4.67%, while in the same week of 2021, its average stood at 3.13%.
The latest jobs report issued by the Bureau of Labor Statistics and continued inflation trends do little to ease upward pressure on rates. “Economic data released last week showed continuing tight labor markets, with strong job growth and a decline in the unemployment rate to 3.6%,” said Paul Thomas, vice president of capital markets at Zillow, in a research blog.
“Inflation trends are continuing, and t. are no signs of improvement to supply chains in many sectors of the economy that could help to ease upward pressure on prices,” he added.
While purchases appeared solid throughout the winter, the recent dramatic rate spikes may be catching up to the market, industry experts acknowledge.
“The increase in mortgage rates has softened purchase activity such that the monthly payment for those looking to buy a home has risen by at least 20% from a year ago,” Khater said.
The release of minutes this week from the Federal Open Market Committee meeting in mid-March also indicated the central bank’s moves will likely do more to drive rate-indicative bond yields up in the coming weeks. Fed officials proposed shrinking its balance sheet, reducing the maximum purchase of Treasuries to $60 billion and mortgage-backed securities to $35 billion each month. The proposal is expected to be approved the next time the committee meets in May.
The 15-year fixed-rate average also continued its rise over the past week, increasing to 3.91% from 3.83% seven days earlier. In the same time period last year, the 15-year average came in at 2.42%.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage climbed 6 basis points to average 3.56%, up from 3.5% a week earlier. One year ago, its average was 2.92%.
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