(March 11): US mortgage rates increased last week by the most since September, a setback for a housing market that had been enjoying easing financing costs this year.
The contract rate on a 30-year mortgage rose 10 basis points to 6.19% in the week ended March 6, according to Mortgage Bankers Association (MBA) data released on Wednesday. That followed back-to-back weeks of the lowest rates since 2022.
The increase in borrowing costs coincides with a sharp rise in the 10-year US treasury yield, which is correlated with mortgage rates, as war with Iran disrupted oil flows and sparked concerns about inflation.
Weeks of lower rates alongside fears of a further rise in home-financing costs may have encouraged some prospective buyers to step off the sidelines last week. The MBA’s measure of applications for home purchases rose 7.8%, the most since early January. An index of refinancing activity edged higher and has increased in all but two weeks this year, based on MBA data.
The market was showing nascent signs of some momentum as affordability constraints began to ease. Figures out on Tuesday showed contract closings on previously owned homes climbed in February. However, any sustained upswing in home-finance costs risks restraining demand entering the crucial spring-selling season.
The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.
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