CONSUMER

Mortgage rates climb to the highest level in a month

Apr 21, 2023, 6:44 PM | Updated: 9:02 pm

Mortgage rates...

Utah home construction. (KSL TV)

(KSL TV)

(CNN) — Mortgage rates rose this week, after five weeks of falling.

The 30-year fixed-rate mortgage averaged 6.39% in the week ending April 20, up from 6.27% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed rate was 5.11%.

“For the first time in over a month, mortgage rates moved up due to shifting market expectations,” said Sam Khater, Freddie Mac’s chief economist.

“Home prices have stabilized somewhat, but with supply tight and rates stuck above 6%, affordable housing continues to be a serious issue for many potential homebuyers,” he said. “Unless rates drop into the mid-5% range, demand will only modestly recover.”

Mortgage rates went higher than 5% for the first time since 2011 a year ago, and have remained over 5% for all but one week during the past year. Since then they have gone as high as 7.08%, last reached in November, and had been trending down since early March.

The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders nationwide. The survey includes only borrowers who put 20% down and have excellent credit.

Rates climbed up this week as 10-year Treasury yields climbed higher. As investors responded to economic indicators, bond yields ticked higher, taking mortgage rates with them.

“Mortgage rates are the product of the larger economic environment, including inflation and employment data as well as banking stability and the Federal Reserve’s actions,” said Hannah Jones, economic data analyst at Realtor.com. “Recent data points to a still-resilient, though the cooling economy, leading many to believe the Fed will elect to raise the target rate at next month’s meeting.”

The Fed does not set the interest rates that borrowers pay on mortgages directly, but its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasury bonds, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does, and investors’ reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.

Home buyers remain very sensitive to weekly changes in mortgage rates.

“Last week’s jump in mortgage rates led to a pullback in mortgage applications, as homebuyers remain sensitive to rate movements,” said Bob Broeksmit, CEO of the Mortgage Bankers Association. “The lack of housing inventory this spring buying season is also keeping many prospective buyers on the sidelines.”

While MBA expects mortgage rates to fall to around 5.5% by the end of this year, more housing supply is needed to improve affordability and meet demand, he said.

Last year’s persistent mortgage rate climb, combined with inflation and home price growth, led many buyers to retreat from the housing market, said Jones.

“While spring is typically a season marked by a lively housing market, this year is proving to be less energetic than previous ones,” she said.

Nevertheless, Jones added, buyer demand shows signs of improvement with each gain in affordability.

As a result, she said, “housing demand remains largely stifled as many buyers wait on the sidelines until the cost of purchasing a home becomes more doable.”

According to a latest report from the Utah Association of Realtors, the state’s median home sales price dropped nearly 8% in March compared to the same month last year.

THE UTAH MARKET

The median sales price in March was $479,368. One year ago, the median price was $520,500.

Year-over-year closed sales in the Beehive State were down more than 22% However, March showed an uptick in real estate activity compared to the winter months.

“I’ve had a number of realtors from Logan to St. George who have told me that the market is picking up,” said Deanna Devey, the realtor association’s communications director. “I think it’s a market where there are good things for buyers and there are good things for sellers.”

Devey said the market is very sensitive to changes in mortgage rates.

“Because affordability is so important and so critical right now, any little change in those interest rates is really affecting people coming out,” she said.

The-CNN-Wire™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

 

KSL 5 TV Live

Consumer

...

Laura He and Hanna Ziady

Global market cheers for US debt ceiling deal fade

European stocks and oil prices gave up early gains Monday, but US stock futures stayed positive following weekend news of an agreement that could avert a catastrophic US debt default.

2 days ago

Left to right, clockwise: Mark Zuckerberg, Elon Musk, Bernard Arnault, Warren Buffett, Michael Dell...

CNN

31 billionaires are worth more than the US Treasury has in cash

Cash levels at the US Treasury are tumbling toward a dangerously low level as Washington waits until the last minute to raise the debt ceiling.

2 days ago

Pride month merchandise is displayed at the front of a Target store in Hackensack, N.J., on May 24....

Danielle Wiener-Bronner

LGBTQ+ creator ‘relieved’ after Target pulls items off shelves after online backlash

When a Target distributor reached out to Erik Carnell last year about possibly placing his brand, Abprallen, in Target stores, he was thrilled. The feeling didn’t last.

4 days ago

grilling meat...

Tamara Vaifanua

Save more, worry less: grilling on a budget

In today’s, ‘Save more, worry less,’ KSL shares some ways to barbecue on a budget.

6 days ago

FILE - Arkansas Gov. Sarah Huckabee Sanders signs into law an education overhaul bill on Wednesday,...

Associated Press

Kids could fill labor shortages, even in bars, if these lawmakers succeed

Lawmakers in several states are embracing legislation to let children work in more hazardous occupations, longer hours on school nights and in expanded roles including serving alcohol in bars and restaurants as young as 14.

7 days ago

Woman texting...

Matt Gephardt

How crooks use texts to get your money, identity, or both.

If you used a mobile phone for any length of time, it’s likely you have gotten text messages that seem like an honest mistake that innocuous-looking text might have come from a scammer.

7 days ago

Sponsored Articles

Asian little girl playing arcade game on the computer machines at the shopping mall outlets...

Get Out Pass

Family Fun Activities in Utah You Have to Try This Summer

These family fun activities will entertain you all summer, so if you ever feel stuck in a rut wondering what to do, refer to this guide!

Woman IT specialist in elegant suit working on notebook computer in data center next to server rack...

Les Olson

Your Complete Guide to Outsourcing IT Services

This guide covers everything you need to know about the different benefits of outsourcing IT services to meet your small business needs.

diverse group of friends dance outside under string lights...

Lighting Design

5 Frequently Asked Questions About Outdoor Lighting

Read for the most frequently asked questions about outdoor lighting to help narrow the search for your home.

Stack of old laptops with dark background...

PC Laptops

Old Laptop Upgrades You Need to Try Before Throwing it Away

Get the most out of your investment. Try these old laptop upgrades before throwing it out to keep it running fast and efficient.

Happy diverse college or university students are having fun on their graduation day...

BYU MBA at the Marriott School of Business

How to Choose What MBA Program is Right for You: Take this Quiz Before You Apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.

Close up of an offset printing machine during production...

Les Olson IT

Top 7 Reasons to Add a Production Printer to Your Business

Learn about the different digital production printers and how they can help your company save time and money.

Mortgage rates climb to the highest level in a month