Mortgage rates edged up this week from a record low as the benchmark 10-year Treasury yield moved higher.
Treasurys surged today after the Bureau of Labor Statistics reported that consumer prices excluding food and energy rose the most ever in July compared with any month in the past 30 years. Traders and investors took that as a sign that the economy is recovering from the Covid pandemic. Mortgage rates tend to track the 10-year Treasury.
The 30-year fixed-rate mortgage rose 2 basis points to 3.24 percent, according to Bankrate’s weekly survey of large lenders. That’s just 2 basis points above the all-time low reached last week.
“Higher-than-expected inflation readings have jolted bond yields out of the past few weeks’ tight range. Expect a bump in mortgage rates to follow,” says Greg McBride CFA, chief financial analyst, Bankrate.com.
Elizabeth Rose, sales manager at AmCap Mortgage, in Dallas said, “news of a possible vaccine, coupled with hotter-than-expected-inflation numbers and plenty of supply, sent the mortgage bond market over a cliff, pushing rates slightly higher this week. The bond market was overdue for a correction. The question now becomes, is this just a temporary correction or the beginning of a new trend to higher rates?”
Meanwhile, the National Association of Realtors reported that median single-family home prices rose in 96 percent of the metro areas it surveyed in the second quarter from a year earlier. This pushed the national median existing single-family home price to $291,300, a 4.2 percent rise from the same quarter a year ago.
“Home prices have held up well, largely due to the combination of very strong demand for housing and a limited supply of homes for sale,” says Lawrence Yun, NAR chief economist. “Historically low inventory continues to reinforce and even increase prices in some areas.”