Mortgage rates hold near 6.71% as the 10-year Treasury yield sits at 4.80%, with the Fed signaling a possible September rate hike and the next CPI report due Sept. 11 as the key catalyst for the housing market.
The 10-year Treasury yield closed at 4.80% on Sept. 2, up from 4.17% a year earlier, and the article says mortgage rates are mirroring that momentum. Fed signaling of a possible September hike and inflation staying elevated over the past four to six months keep upward pressure on yields. A 1.91 percentage point spread over the 10-year keeps mortgage rates near 6.71%.
The article points to rising bond-market volatility, elevated inflation over the past four to six months, and Fed signaling of a possible September rate hike. The 10-year closed at 4.80% on Sept. 2, up from 4.17% a year earlier.
Jeff DerGurahian, loanDepot head economist, says flat headline inflation and core inflation up no more than 0.2% month-over-month could convince the Fed it does not need to act, which would ease upward pressure on yields.
The article says the federal funds rate directly influences shorter-term lending rates and that a Fed hike would likely push mortgage rates and short-term rates higher. With traders nearly evenly split on a quarter-point hike at the next FOMC meeting, 2-year Treasury yields face upward pressure.
The article says the fed funds rate directly influences shorter-term lending rates; 2-year yields tend to follow Fed expectations. A September hike would push them higher.
The article says Wall Street traders are nearly evenly split on a quarter-point hike at the next meeting in two weeks. The Sept. 11 CPI report will be critical.
The average 30-year fixed mortgage rate rose to 6.71% as of Sept. 3, five basis points above last week, while the 15-year rate hit 6.04%. The 10-year Treasury yield closed at 4.80%, up from 4.17% a year ago, and lenders still add a spread of roughly 1.91 percentage points. With the Fed signaling a possible September hike and Fannie Mae projecting 6.8% mortgage rates through 2027, the Sept. 11 CPI report is the main swing factor.
Not soon, according to Fannie Mae's August forecast, which sees 30-year rates averaging 6.8% through 2027. The Fed is signaling a possible September rate hike, and the Sept. 11 CPI report will be decisive.
Lenders price home loans by adding a spread to the 10-year Treasury yield to cover origination costs and risk. With the 10-year at 4.80%, that spread is currently about 1.91 percentage points.
No — a hike would normally push short-term borrowing costs and mortgage rates higher. The article says mortgage rates mirror fed funds rate trends, so the expected September hike could keep rates near current levels or push them up.