Mortgage rates rise sharply after three weeks of easing

“For Sale” sign outside a home in Crockett, California on Tuesday, May 31, 2022.

David Paul Morris | Bloomberg | Getty Images

Mortgage rates rose sharply this week after falling over the past three weeks.

On Monday, the 30-year fixed price reached 5.36% and then rose again on Tuesday to 5.47%. Mortgage News Daily. Volatility in world markets on Monday led to an increase in bond yields. Mortgage rates are weakly dependent on the yield of 10-year US Treasury bonds.

The average rate on popular 30-year fixed loans ended last week at 5.25%. The average rate on popular 30-year fixed loans ended last week at 5.25%. The last high, three weeks ago, was 5.67%, but the rate fell as the stock market sold off and bond yields fell.

The jump on Tuesday was probably related to the published data of the US Manufacturing Index.

“The rise in the manufacturing index suggests that the economy is not slowing down very quickly,” Matthew Graham, chief operating officer of Mortgage News Daily, wrote on the website.

Mortgage rates, which are much higher than they were at the start of the year, have put the brakes on a hot housing market over the past few weeks. Realtors are reporting declining sales, and demand for mortgages to buy a home is also falling.

While home sales and mortgage demand are falling, home prices are still rising rapidly. Prices typically lag sales by about six months, but the rare momentum in the market today – high demand and very low supply – is still keeping prices high.

National Association of Realtors Chief Economist Lawrence Yun said on CNBC’s Power Lunch on Monday: “Inevitably, house price growth will slow in the coming months.”

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