Mortgage Rates Jump and Resume Upward Trend

What happened to mortgage rates this week?

The Freddie Mac 30-year fixed mortgage rate jumped 15 basis points to 6.51% this week, resuming its upward trend after a brief 1 basis-point reprieve last week, as rising Treasury yields put upward pressure on borrowing costs. The 10-year Treasury yield climbed toward 4.67% to start the week, its highest level in over a year, following the April CPI report showing consumer prices up 3.8% year over year, ahead of expectations, with energy prices rising 17.9% annually as the Iran conflict continues to disrupt oil supply.

The conflict in the Middle East continues to play an outsized role in how investors are assessing the economic outlook, and mortgage rates are moving accordingly. In recent weeks, headlines suggesting escalation have tended to push longer-term yields higher, while signs of progress toward resolution have had the opposite effect. That dynamic, rather than any domestic policy development, remains the primary force shaping borrowing costs right now. A Fed leadership transition is underway this week, but given that the chair is one vote among many, and that a resurgence in inflation is likely to reinforce caution among FOMC members regardless of leadership, that story is unlikely to move rates in a meaningful way.

What does this mean for the housing market?

For buyers, inventory remains up meaningfully year over year, homes are sitting on the market longer, and list prices have softened in many markets. The spring season still offers real opportunity, though each uptick in rates narrows the pool of buyers who can make the numbers work.