Mortgage rates march higher, stoked by rising Treasury yields

What a difference a year makes. A year ago, you could find a 30-year fixed rate mortgage for under 3%. Today, it is over 5%.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average increased for the seventh week in a row, rising to 5.11% with an average 0.8 point. (A point is a fee paid to a lender equal to 1% of the loan amount. It is in addition to the interest rate.) It was 5% a week ago and 2.97% a year ago. The 30-year fixed rate hasn't been this high since February 2011.

Freddie Mac, the federally chartered mortgage investor, aggregates rates from around 80 lenders across the country to come up with weekly national averages. The survey is based on home purchase mortgages. Rates for refinances may be different. It uses rates for high-quality borrowers with strong credit scores and large down payments. Because of the criteria, these rates are not available to every borrower.

The 15-year fixed-rate average climbed to 4.38% with an average 0.8 point. It was 4.17% a week ago and 2.29% a year ago. The five-year adjustable rate average grew to 3.75% with an average 0.3 point. It was 3.69% a week ago and 2.83% a year ago.

"The Freddie Mac fixed rate for a 30-year loan kept marching up this week, following the continued surge in the 10-year Treasury," George Ratiu, manager of economic research at Realtor.com, said. "Markets are also pricing in a likely 50 basis point hike at the central bank's next meeting on May 4th, so we expect mortgage rates to continue to rise."

A sharp sell-off of Treasurys has caused yields to skyrocket. And because mortgage rates are closely tied to the movement of long-term bonds, it is worth paying attention to the 10-year Treasury yield's rapid rise.

The yield on the 10-year Treasury is fast approaching 3%, a level not seen since December 2018. This...