NEW YORK (Reuters) - U.S. mortgage rates, which have hovered at or near historic lows for months and contributed to the housing market bouncing back to above pre-pandemic levels, are now on the rise.
Freddie Mac (OTC:FMCC), the U.S. government-owned mortgage holder, reported on Thursday that the 30-year fixed rate mortgage has edged up 0.6 percentage points to 3.02%, its highest level since July.
"Since reaching a low point in January, mortgage rates have risen by more than 30 basis points, and the impact on purchase demand has been noticeable," said Sam Khater, chief economist with the government-owned mortgage holder. "While purchase activity remains high, it has cooled off over the last few weeks and is currently on par with early March, prior to the pandemic."
This aligns with data from the Mortgage Bankers Association, which reported on Wednesday that the average 30-year fixed contract rate increased to 3.23%, marking the second straight week above the 3% level which it sank below in mid-November.
Mortgage rates tend to shadow moves in the 10-year Treasury yield, which has climbed in recent weeks on expectations that government stimulus and a countrywide vaccination program are fueling an economic rebound in the U.S.
Graphic: MBA - https://graphics.reuters.com/USA-STOCKS/bdwvknwwapm/mba.png
Low mortgage rates, along with spiking demand driven by a flight to the suburbs in search of lower population density and home office space, have contributed to a surge in real estate prices and driven supply to record lows.