While the 30-year fixed rate mortgage remained under 7% for the 17th consecutive week according to Freddie Mac's calculations, it increased 5 basis points as the bond markets remain volatile over the U.S. economy.
This and other measurements moved in the same direction with the yield on the 10-year Treasury, which rose 25 basis points between May 7 and May 14.
In fact, two of the trackers National Mortgage News looked at are showing rates above 7%.
How mortgage rates moved this week
The 30-year FRM averaged 6.81% as of May 15,
Meanwhile, the 15-year FRM had a smaller jump, just 3 basis points to 5.92%, versus 5.89% last week. For
The 10-year Treasury was down 5 basis points as of 11 a.m. on Thursday morning, likely because of the Producer Price Index report, to 4.48% from 4.53% at its close on Wednesday.
But from its close of 4.28% on May 7, the yield steadily climbed over the week, with some trackers going back over the 7% level for the 30-year FRM.
How inflation data affected bond yields
The good news that the PPI dropped 0.5% in April from March and gained 2.4% annually followed Tuesday's
The early take from these reports is that the tariffs are not inflationary right now.
"While an encouraging CPI report for the Federal Reserve, policymakers are likely to wait for additional clarity on the evolving tariff landscape before making decisions on future rate cuts, especially with the labor market holding steady," Sam Williamson, an economist with First American Financial, said in a Tuesday statement.
Even with the CPI news, the bond market is in charge, as the core numbers were sticky and this kept yields elevated, said Nigel Green, CEO of financial advisory the deVere Group.
"With 10-year Treasury yields hovering near 4.5%, financial conditions are already tightening," Green said in a Tuesday statement. "Add aggressive tariffs into that mix and you risk tipping the economy into deeper volatility."
The Federal Open Market Committee is expected to remain cautious as a result of the CPI news, Samir Dedhia, CEO of One Real Mortgage, added on Tuesday.
"Markets are now pricing in fewer rate cuts for 2025, which means mortgage rates will likely stay in the 6.5% to 7% range for now," Dedhia said. "Affordability challenges persist, especially as housing costs remain stubbornly high."
Other mortgage trackers rise above 7%
Lender Price data as posted on the National Mortgage News website put the 30-year FRM at 7.015% at that time.
Zillow's rate tracker was up 2 basis points on the day, to 7.07% from 7.05% at the end of Wednesday. This compared with the previous week's average of 6.96%.
As of Wednesday, data from Optimal Blue had the conforming 30-year fixed at 6.885%, as the rate rose steadily from 6.76% on May 7.
The Mortgage Bankers Association's
Rising inventories have supported a boost in homebuyer demand in recent weeks, with purchase applications up 2% last week and an impressive 18% compared to last year," Bob Broeksmit, president and CEO, said in a Thursday morning comment on the survey. "MBA expects activity to pick up even more if mortgage rates move further below 7%."
The MBA's own April forecast expected the 30-year to average 7% for the current quarter.
Right now, many observers are expecting rates to end the year in the mid-6% area, including Fitch Ratings,
"Mortgage rates look prepared to stay sticky in the 6.75%-7.0% area with the 10-year now approaching 4.5%, and expectations for rate cuts through year-end getting trimmed slightly," BTIG analyst Eric Hagen wrote in his May 13 Mortgage Finance Roundup.
"Macro uncertainty and growing calls for recession put a direct spotlight on the path for home prices, especially if mortgage rates move higher," Hagen wrote. Homes.com just reported four consecutive months of diminishing annual home price increases.
