Mortgage Rates Jump to 6.75% Amidst Bond Yield Volatility

Mortgage Rate Volatility

• 📈 The average rate on a 30-year fixed mortgage saw a significant jump of 15 basis points this morning, reaching 6.75%.
• ⚠️ This increase is attributed to rising bond yields, which also caused Friday's early rate to be revised higher.
• 📌 Despite recent volatility, mortgage rates have remained in a tight range for the past month and a half.

Housing Market Trends

• 📉 Rates were above 7% at the start of the year but dropped sharply in February.
• 🏠 Pending home sales rose only 2% in February despite falling rates and increased inventory, remaining nearly 4% lower than the previous year.
• 📊 Current weekly mortgage applications show home buyer demand is wobbling and remains well below pre-pandemic levels.

Rate Movements and Buyer Demand

• ⚠️ A key observation is that mortgage demand from home buyers was falling even as mortgage rates were falling in February.
• 🔑 Housing experts suggest that falling mortgage rates are occurring for reasons that do not encourage consumers to make large purchases like a home.