Mortgage rates

The 30-year fixed, which was threatening going above 7% again according to Freddie Mac data, was 18 basis points lower this week.

A resilient U.S. economy, lingering inflation and comments from the Federal Reserve contributed to a 10-basis-point hike in the 30-year fixed rate, Freddie Mac said.

The markets had a muted reaction to the Federal Open Market Committee pause on raising short-term rates a week ago, Freddie Mac found.

A change in investor sentiment toward an expected pause by the Fed in short-term rate hikes was the driving force behind the current surge, Freddie Mac said.

A potential pause in the cycle by the Federal Open Market Committee is welcomed by housing industry observers, but inflation and inventory hinder activity.

Both 30- and 15-year averages dropped for the first time in six weeks, as investors flocked to safety of 10-year Treasuries.

The increase reflects the rise in the 10-year Treasury yield, which is back above 4% for the first time since that month.

Persistent inflation concerns drove the 30-year average up 41 basis points this month.

Federal Reserve Bank of Kansas City President Esther George said the central bank should raise its benchmark interest rate above 5% and hold it there well into 2024 to bring inflation down.

The 30-year fixed rate surged 15 basis points from a week earlier but ends 2022 at more than twice its mark from a year ago.

The sharpest run-up in rates seen in over three decades slashed mortgage origination volumes, and contributed to a volatile market environment, but had some cyclical benefits for servicing.

Investors are looking past the current boom in loan activity, fearing that inflation and other factors will cool demand and make it harder for borrowers to make payments.

BayFirst Financial Corp. said it initiated the process of shuttering its out-of-state network of residential mortgage loan production offices.

The 15-year average crossed the 5% threshold for the first time in over a decade.

Higher mortgage rates have led to a sharp slowdown in cash-out refinances. Second mortgages were up nearly 50% in the first five months of the year as homeowners looked for new ways to borrow against their equity.

The 30-year average has made a steep reversal over the past two weeks following a large acceleration in mid-June.

The moves were widely anticipated, with the markets already pricing them in, as the central bank attempts to get the upper hand on record-setting inflation.

The 30-year average has risen by more than a full percentage point in a little over a month.

Many banks reported sharp declines in income from home loans during the second quarter. The large gains they enjoyed last year thanks to a surge in refinancing activity are unlikely to return, according to bankers and analysts.

Home loans accounted for the bulk of the industry’s lending gains in 2020, but inventory shortages in some markets and an uneven economic recovery may dim prospects this year.