The 15-year fixed-rate mortgage (FRM) and the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) also posted week-over-week gains. The 15-year FRM rose 16 basis points to 2.93%, while the five-year ARM climbed nine basis points to 2.80%.
Khater pointed to the combination of rising inflation and an improving job market as the main driver of this week’s mortgage rate hike. US inflation hit a 40-year high in January, accelerating to a 7.5% annual rate, the Labor Department said Thursday. The pace of labor market recovery also grew stronger last month, with total nonfarm payrolls increasing by 467,000.
“Rate increases are expected to continue due to a strong labor market and high inflation, which likely will have an adverse impact on homebuyer demand,” Khater said.