Mortgage rates

The latest inflation news has created concern that the Federal Reserve's pivot on short-term rates could be delayed.

For the first time since mid-December, the Freddie Mac survey reports mortgage rates over 6.7%.

Even with the 9 basis point rise this week, they have remained at the same level since mid-December, and that should bring people into the market, Freddie Mac said.

Its January forecast reverses the call first made in April 2022 that the U.S. economy would slip into an extended downturn.

The move is somewhat counterintuitive relative to other market signals but Fannie Mae generally forecasts a net positive shift in lending conditions this year.

For the past week, the benchmark 10-year Treasury closed above 4%, as the markets priced in an increase in the consumer price index.

But this week the 30-year fixed rate mortgage average increased for the first time in two months.

Rates that have been below 7% for two consecutive weeks have given originators a gift at what's typically a slow time of year, Freddie Mac said.

The Fed's announcement is responsible for a 19 basis point drop in the 10-year yield over a two-day period, pushing the 30-year fixed under 7% for the first time since August, Freddie Mac said.

Recent economic data pushed investors toward Treasurys over the past week, driving 10-year yields to as low as 4.1%.

The 30-year average declined for the fifth consecutive week, as purchase demand picking up at the same time, according to Freddie Mac.

Even if the 30-year fixed were to slip further to 6.4%, it is not enough to end the seller's strike, economists said.

Broader economic factors, including growing household debt, are also likely to keep the housing market stagnant, Freddie Mac said.

Public policy experts debated the effect of rising rates on the mortgage market, the impact on homebuyers and ways that Fannie Mae and Freddie Mac could exit conservatorship at the National Mortgage News Digital Mortgage Conference.

Even as Freddie Mac's survey put rates at their highest since December 2000, factors like rising oil prices and a government shutdown could slow the economy.

Overall rate locks dropped 1.5% on a month-to-month basis; the drop in purchase volume was higher at 1.9%, Black Knight said.

Key data points have shown price and wage pressures continue to dissipate, which should bolster the case for an end to rate increases, but strong labor-market activity may keep policymakers uneasy.

The average for a 30-year home loan marked the fourth straight week of increases, according to Freddie Mac.

But a Zillow economist argues that there's plenty of evidence suggesting strong GDP and job growth had more to do with the increase than what Fitch did.

There's divergence of opinions between one more rate hike this cycle and no further actions.