Average US fixed mortgage rates saw their biggest weekly jump of the year, hitting their highest level since the week ending May 1. This is according to new survey data from Freddie Mac.
During the week ending September 18, the 30-year fixed-rate mortgage averaged 4.23%, up from 4.12% a week ago. The 15-year rate averaged 3.37%, up from 3.26% last week.
“Fixed-rate mortgage rates rose this week following the increase in 10-year Treasury yields being partially fuelled by market speculation the Federal Reserve might change its interest rate guidance,” Freddie Mac chief economist Frank Nothaft said.
According to data from the Mortgage Bankers Association, mortgage applications for home purchases are down 10% from a year ago.
A jump in rates could have to effect of spurring prospective homebuyers on the sideline to make a move, boosting the housing market in the short-run.
But should rates trend higher, the housing market could decelerate further and even decline.