A “For Sale” sign outside a home in Crockett, California, on Tuesday, May 31, 2022.
David Paul Morris | Bloomberg | Getty Images
Mortgage rates rose sharply this week, after falling over the past three weeks.
The 30-year fixed reached 5.36% on Monday and then rose again to 5.47% on Tuesday, according to Mortgage News Daily. World market volatility on Monday boosted bond yields. Mortgage rates are loosely following the 10-year US Treasury yield.
The average rate on popular 30-year fixed-term loans ended last week at 5.25%. The average rate on popular 30-year fixed-term loans ended last week at 5.25%. The last high, three weeks ago, was 5.67%, but the rate went down as the stock market sold and bond yields fell.
Tuesday’s jump was probably due to published data from the U.S. manufacturing index.
“The rise in the manufacturing index suggests that the economy is not slowing down very quickly,” wrote Matthew Graham, COO of Mortgage News Daily on the site.
Mortgage rates, which are much higher than at the beginning of the year, have slowed the hot real estate market in recent weeks. Real estate agents report lower sales and the demand for mortgages to buy a home is also declining.
Although both home sales and mortgage demand are declining, house prices continue to rise rapidly. Prices usually delay sales by about six months, but the current rare market dynamics – strong demand and very low supply – continue to keep prices high.
The chief economist of the National Association of Realtors, Lawrence Yun, told CNBC’s Power Lunch on Monday: “It is inevitable that the appreciation of the house price will slow down in the coming months.”