Mortgage Rates Hit 7-Year High

Bond yields jumped on Friday in response to a strong jobs report. Mortgage rates went along for the ride.

The average 30-year mortgage rate topped 5% on Friday to a Fresh 7-Year High.

Mortgage rates had a bad week and an especially bad day following a much stronger-than-expected jobs report.

Mortgage rates were already operating fairly close to long-term highs, but today's move easily took them to new highs. The average lender is now quoting conventional 30yr fixed rates of 5% for relatively ideal scenarios.

Those without a big down payment or without perfect credit/income can expect to see even higher rates. Most lenders ended up recalling the morning's initial rate sheets and reissuing higher rates at least once today.

There's really no silver lining apart from the fact that the higher rates go, and the quicker they get there, the closer we get to the point that the economy slows down as a result. When that happens, rates will begin to fall before just about anything else. Unfortunately, the expected time frame for such things is incredibly wide (not the sort of thing you hope for if you need to buy/refi). And yes... it's also unfortunate that our one source of solace at the moment involves an economic downturn, but if you want low interest rates, that tends to come with the territory.

Many recessions start out as a housing bust. Another one may be in the works.

Mike "Mish" Shedlock

Comments
No. 1-7
AWC
AWC

How long can these doomer sites keep getting clicks before the last “believer” declares bankruptcy?

nic9075
nic9075

Mortgage rates never fell below 6.5% in the 1990s and were over 8% for all of the 1980s

nic9075
nic9075

Well the NYC metro area and all of Eastern Massachusetts is booming. No matter where mortgage rates end up the Outlook has never been better for both areas. Rents, and housing prices are still soaring. $2000 a month is the starting rent for a tiny studio apartment in the outer boroughs of NYC or in eastern Massachusetts at least 25 miles outside Boston. $3,000 is the entry point in Boston and rents in Manhattan are $4000 a month and up. Realtors have waiting lists of prospective buyers , most listings are on the market for literally a few hours. Selling prices are 110% of asking price

Sechel
Sechel

The Fed's been manipulating the mortgage market since the crisis. They've finally stopped purchasing them for the Fed's portfolio. We're seeing a return to normalcy. A 3% mortgage rate would only mean more misallocations of capital into real estate.

Six000mileyear
Six000mileyear

For a home buyer to make the same payment as when mortgage rates were near their lows of 3.5%, they would have to buy 12% less house. Or a seller would have to accept an offer 12% lower. So prices are going to come down one way or another.

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