Mortgage lenders left their desks Friday with the 30-year fixed finally below 6%. When they returned Monday morning, the market was in turmoil, with the benchmark 10-year Treasury at one point up 11 basis points from the previous close.
As a result, the 30-year fixed rate mortgage
But on the bright side, affordability is much improved over prior periods.
"In fact, rates are down nearly
Freddie Mac's mortgage rate tracker for this week
The increase to 6% on March 5 compares with the 5.98% rate last week, which was the lowest since September 2022. For
Meanwhile, the 15-year fixed rate mortgage moved lower this past week by 1 basis point, to 5.43% from 5.44 for Feb. 26. A year ago at this time, it was at 5.79%; back in 2024, it was 6.22%.
Between Feb. 19 and Feb. 26, however, the 15-year average rose by 9 basis points.
The Freddie Mac PMMS uses data from applications submitted to its automated underwriting engine, and thus might not fully reflect the changes in the bond market in recent days.
How the 10-year Treasury yield moved since last Friday
Since its Monday close at 4.05%, up 9 basis points from last Friday, the 10-year added another 3 basis points over the next two days to close at 4.08% on Wednesday.
But as of 11 a.m. on Thursday morning, prompted by new skittishness from investors over oil prices, the yield jumped another 6 basis points to 4.14%. The Dow Jones Industrial Average was over 800 points lower by 11:30 a.m.
How other rate trackers have changed this week
Optimal Blue's website showed the conforming 30-year at 5.99% on Wednesday,
But the jumbo jumped on Wednesday to 6.26% from 6.19% on Tuesday, while the Federal Housing Administration-insured mortgage was priced at just under 5.9%, a 6 basis point gain over two days.
Can mortgage rates keep rising?
The bond market "briefly buckled" because of the situation, said Kate Wood, Nerdwallet's home and mortgage expert.
"Concerns that the conflict will
"The numbers we're actually seeing this week are employment data, but given that it all predates the war those figures may be a snapshot of the past rather than a signal of what's to come," she continued. "Still, stronger jobs data coupled with inflation concerns could put additional upward pressure on mortgage rates."
The financial markets had been poised for easing U.S. inflation and lower borrowing costs this year, said Nigel Green, CEO of financial advisory the deVere Group, in a Wednesday commentary. But the weekend's developments have upended those expectations and more pain may be coming.
"Investors had been pricing in a relatively stable economic backdrop," Green said. "The conflict involving Iran introduces a powerful new variable that markets may not yet be fully reflecting."
Refinance applications increased last week
The Mortgage Bankers Association's Weekly Application Survey released Wednesday had the conforming 30-year fixed unchanged from the prior week at 6.09%. However, the survey period ended Feb. 27, prior to the initiation of the Iran war.
Apps were up 11% during the period, led by a 14% gain in refinance volume.
"As
Even with mortgage rates at or pushing back over the 6% mark, gains in housing affordability achieved over the past year remain largely intact, said Kara Ng, senior economist at Zillow Home Loans, in a Wednesday evening statement.
"Buying power is up about $30,000 compared to this time last year, as mortgage rates fell from the high 6% range to the low 6% range," Ng said. "Households that did not buy or refinance a home during the mortgage rate dip might have missed a flash sale, but can still buy at a discount."
