US Mortgage Rates Jump After Four Weeks of Declines
US mortgage rates rose sharply on Tuesday after four consecutive weeks of declines, reversing a recent improvement in borrowing conditions. The average rate for a 30-year fixed mortgage climbed 12 basis points from Monday to 7.30%, according to Mortgage News Daily—the largest one-day increase in more than a month. The move followed a hotter-than-expected consumer price index showing broad upward pressure on prices, as well as a stronger monthly employment report released the previous Friday.
The latest inflation data carried particular weight because the Federal Reserve has indicated that controlling inflation is currently a greater priority than supporting full employment. The increase came after the Mortgage Bankers Association’s weekly average for a 30-year fixed loan with a 20% down payment fell to 7.21% from 7.30%, marking its fourth consecutive weekly decline and the lowest level since mid-September.
Lower rates had begun to revive housing activity. Total mortgage applications increased 6.2% last week, with refinancing applications up 5%, though refinancing remained 57% below the same week a year earlier. Purchase applications rose 8% week over week but were still 18% lower than a year ago. FHA rates also moved below 7%, more than 20 basis points below conforming rates, supporting first-time buyers. Applications for conventional, VA and FHA purchases all increased, particularly those for FHA and VA loans, while the share of adjustable-rate mortgage applications edged down.
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