U.S. mortgage rates rise to the highest level in six weeks

Key points -

l Mortgage rates rose this week

l 30-year average jumped by nearly 6 basis points, the highest average since mid-August

 U.S. mortgage rates rose this week, raising the 30-year rate by nearly 6 basis points to 3.12%, its highest average in more than six weeks, since mid-August.

Mortgage News Daily reported that mortgage rates were at their highest levels in around a month, with the 30-year fixed average crossing over 3% early this week and then jumped 9 basis points Thursday to 3.10%, increasing from 2.93% a week ago.

Refinance rates rose by four to five points across 30-year, 15-year, and Jumbo 30-year refinancing loans. In general, refinance rates were priced 10 to 18 basis points higher than new purchase rates on Thursday.

MBA’s associate vice president of economist and industry forecasting, Joel Kan, said, “Housing demand is strong heading into the fall, despite fast-rising home prices and low inventory. The inventory situation is improving, with more new homes under construction and more homeowners listing their homes for sale. Despite this week's increase, purchase applications were still 13 percent lower than the same week a year ago.”

The first-time buyer share of sales in August dropped to just 29%, the lowest since the start of 2019 when rates on the 30-year fixed were over 5%. Generally, first-time homebuyers make up about 40% of home sales.

The mortgage rates are loosely connected to the 10-year U.S. Treasury yields and are controlled by the demand for mortgage-backed bonds, which are bought by the Fed. 

With inputs from CNBC