Mortgage rates rise for second straight week, sapping refinancing demand
Mortgage rates moved slightly higher for a second straight week, though they remain near the lowest levels of the year.
The average 30-year fixed-rate mortgage was 6.34% this week through Wednesday, compared with 6.3% a week earlier, according to Freddie Mac data. The average 15-year mortgage rate was 5.55%, up from 5.49%.
Mortgage rates have gradually moved higher since the Federal Reserve cut its benchmark interest rate last month, reflecting investor uncertainty around the speed and aggressiveness of future rate cuts.
The 10-year Treasury yield, which mortgage rates closely track, has drifted slightly lower in recent days, although its path down has been choppy. Near midday on Thursday, the 10-year yield stood near 4.1%.
The 10-year has oscillated as investors weigh the potential economic effects of the government shutdown, and ultimately didn’t move much after a new report from payroll processor ADP showing that private employers shed 32,000 jobs last month.
Some economic data that can spark mortgage rate moves has been delayed amid the government shutdown.
The US government’s monthly nonfarm payrolls report won’t be released as scheduled on Friday. Last month, weaker-than-expected payrolls data sent Treasury yields and mortgage rates tumbling.
Mortgage rates around current levels have effectively ended a brief refinancing wave. Refinancing applications dropped 21% through Friday compared to a week earlier, the Mortgage Bankers Association said on Wednesday, while mortgage applications were down just 1% week over week.
Read more: When will mortgage rates go down?
“An increase in mortgage rates cooled borrower demand during the last full week of September,” Mortgage Bankers Association president and CEO Bob Broeksmit said in a statement. “Although purchase applications continue to track above year-ago levels because of lower rates, economic uncertainty and affordability challenges continue to hold back home sales.”
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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