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.
Read more: US jobs report – January better than expected
“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.