Mortgage rates have fluctuated again this week, seeing an increase as inflation rose due to elevated oil, gas and energy prices due to continued geopolitical tensions, according to the latest data from Freddie Mac.
Freddie Mac’s Primary Mortgage Market Survey® found that the 30-year fixed-rate mortgage (FRM) had increased from 6.36% last week to 6.51% this week. The 15-year FRM also increased from 5.71% last week to 5.85% this week.
Rising Treasury yields were pointed to as a proponent of the increase, coupled with the conflict in the Middle East, as stated by Realtor.com® Senior Economist Anthony Smith. Specifically, the Treasury yield rose to 4.67% this week, which Smith said is the highest level reported in over a year, as overall inflation in the latest CPI hit 3.8% and energy prices hit 17.9% inflation.
The Middle Eastern conflict “continues to play an outsized role” in the economy, Smith explained.
“In recent weeks, headlines suggesting escalation have tended to push longer-term yields higher, while signs of progress toward resolution have had the opposite effect,” he continued. “That dynamic, rather than any domestic policy development, remains the primary force shaping borrowing costs right now.”
Despite the increases this week, both the 30-year and 15-year FRMs are lower year-over-year, down from 6.86% and 6.01%, respectively.
Smith also noted that inventory has been seeing “meaningful” increases, and affordability has seen some expansion—both improvements for buyers in this high rate environment.
As always with rate fluctuations, Freddie Mac’s Chief Economist Sam Khater reminded real estate professionals of the advice to give buyers that “by shopping around for the best mortgage rate and getting multiple quotes, they can potentially save thousands.”
Turning toward the Federal Reserve, Smith said that even though the Fed is currently in transition, “given that the chair is one vote among many, and that a resurgence in inflation is likely to reinforce caution among FOMC members regardless of leadership, that story is unlikely to move rates in a meaningful way.”
