The average 30-year fixed-rate mortgage rate has crossed 5% and now stands at 5.02%, according to Daily Mortgage News. This is the first time it has exceeded this limit since 2011, with the exception of two days in 2018. It was 3.38% one year ago today.
Mortgage rates, which loosely track the yield on 10-year US Treasuries, have been on the rise since the start of the year, in part due to the Federal Reserve’s policies to curb inflation as well as the global economic turmoil caused by Russia’s invasion of Ukraine.
Bonds were having a rough morning already, but then came comments from Fed Vice Chair Lael Brainard that the pace of the Fed’s balance sheet cuts will be much greater than last time and that the maximum pace of cuts will materialize significantly very soon in bonds.
Matthew Graham, chief operating officer of Mortgage, told the News Daily. “At this point, traders are taking Brainard’s comments to predict a very unfriendly bond-buying conversation that will be revealed in the minutes.”
For homebuyers already facing The most expensive housing market in recorded historyHigher rates increase pain. Another report released this morning from CoreLogic showed that prices in February were a staggering 20% higher than last year. This is the 12th consecutive month of annual increases.
Correction: The 30-year fixed rate mortgage exceeded 5% on Tuesday for the first time since 2018. An earlier version of this story missed the last time the rate was above that level.