The Housing Market has Witnessed a Mortgage Rate Rise of 5.5%... Since last week...
The popular 30-year mortgage rate jumps to 6.28%...
In just a week, mortgage rates have made a scary jump as fears of an aggressive rate hike (some are speculating a near 100bps jump) from the Fed. The very popular 30-year fixed mortgage had its rates jump by 10bps to nearly 6.3% (actual 6.28%) yesterday following a 33bps jump on Monday. This is a jump of 5.55% since just last week.
A sharp turnaround in the housing market has been put into effect due to the rising rates. Mortgage demand has since begun to drop and home sales have slumped for six straight months. The home price bubble hasn’t cooled down yet, however, as the pandemic-driven demand and record low supply continue to be the story.
July of 2013 was the last time economists witnessed such a week-to-week jump. In 2013, investors sent Treasury yields soaring after the Fed said it would slow down its purchases of the bonds.
“The difference back then was that the Fed had simply decided it was time to finally begin unwinding some of the easy policies put into place after the financial crisis. This time around, the Fed is in panic mode about runaway inflation.”
Matthew Graham, chief operating officer of MND, said.
During the beginning of the pandemic, a handful of record low mortgage rates were recorded. The support of the Fed pumping fake money into the mortgage-backed bongs ended and holdings within that sector shortly began offloading. Rates rose initially in January with the average rate just sitting at 3.25% and pushing higher since then.