Overview of Mortgage Rate Increase#
Last week, US mortgage rates saw their largest increase since September, which poses a challenge for a housing market that had been benefiting from lower financing costs earlier this year.
Details on Rate Changes#
According to the Mortgage Bankers Association (MBA), the average rate for a 30-year mortgage rose by 10 basis points, reaching 6.19% for the week ending March 6. This increase follows two weeks of the lowest rates seen since 2022.
Factors Influencing Rates#
The rise in mortgage rates is linked to a significant increase in the 10-year US Treasury yield, which often moves in tandem with mortgage rates. This spike is attributed to ongoing geopolitical tensions, particularly the conflict with Iran, which has disrupted oil supplies and raised inflation concerns.
Market Activity and Trends#
Despite the increase in mortgage rates, the MBA reported a 7.8% rise in applications for home purchases last week, marking the highest increase since early January. Additionally, refinancing activity has also seen a slight uptick, having increased in nearly all weeks this year except for two. Earlier data indicated that contract closings on previously owned homes rose in February, suggesting that the market was gaining some momentum as affordability issues began to ease.
About the MBA Survey#
The MBA conducts its survey weekly, gathering responses from mortgage bankers, commercial banks, and thrifts. This data represents over 75% of all retail residential mortgage applications in the United States.