Mortgage rates
There concerns that recent news over inflationary trends could delay any move by the Federal Open Market Committee to switch to a short-term rate cut.
The 30-year fixed averaged 6.94% for the week of Feb. 29, following two consecutive weeks where the rate rose by 13 basis points, the Freddie Mac Primary Mortgage Market Survey said.
Meanwhile the 15-year FRM declined by 3 basis points to 6.26%.
For the
"The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for homebuying," said Sam Khater, chief economist at Freddie Mac, in a press release. "While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines."
This follows a week where the benchmark 10-year Treasury yield fell to 4.23% at 11 a.m. on Feb 29 from a peak of 4.35% on Feb. 22. Unlike short-term rates, the FOMC does not control movements in the 10-year Treasury.
That change was not seen in the Zillow rate tracker, which was at 6.68% at that time, only down by one basis point from the previous week's average.
The Mortgage Bankers Association's
"Mortgage applications declined for the third consecutive week as rates over 7% continue to put a damper on activity," Bob Broeksmit, the MBA's president and CEO, said in a Thursday morning statement. "Higher than anticipated inflation and jobs data are keeping upward pressure on mortgage rates, and an insufficient volume of existing homes for sale in many markets is making it even more difficult for many aspiring buyers to get in the market."
Optimal Blue's tracker from its product and pricing engine had the 30-year FRM averaging 6.934% on Feb. 28, virtually flat compared with seven days prior.
The Personal Consumption Expenditures price index, which has been labeled as the Federal Reserve's metric of choice on inflation, rose 0.3% in January from the prior month and 2.4% on an annual basis.
That will cause the Fed to delay any rate cuts until later in the year, said Nigel Green of forex trader deVere Group.
"We expect the easing of monetary policy to be ruled out in March by the Fed," Green said in a press release, "Indeed, with the trajectory to get back to the 2% inflation target looking increasingly slow, and with officials exercising caution, we could have to wait to until the latter part of the year for the highly anticipated Fed pivot."
Earlier this week, First American
