Housing Market Hits Speed Bump as Mortgage Rates Surge
After a prolonged period of decline, US mortgage rates took a sharp turn upward last week, putting the brakes on a budding housing market revival. The sudden spike marked a dramatic shift, with the 30-year mortgage contract rate jumping 22 basis points to 6.36% in the week ending October 4, according to data from the Mortgage Bankers Association. This represents the highest level since August.
The refinancing index plummeted 9.3%, its largest drop since mid-August, while the gauge of home purchase applications also edged downward. The surge in mortgage rates is closely tied to the recent rise in Treasury yields, which were influenced by last week’s robust US jobs report. As a result, traders have significantly reduced their bets on aggressive Federal Reserve interest-rate cuts.
The Mortgage Bankers Association’s weekly survey, which has been tracking data since 1990, collects responses from mortgage bankers, commercial banks, and thrifts. The comprehensive data set covers over 75% of all retail residential mortgage applications in the US, providing a detailed snapshot of the market.
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