Rates sailed into dangerous territory and are now just below their respective 52-week highs. The 30-year fixed rate mortgage jumped 30 basis points to 6.25%. Meanwhile, the 15-year mortgage experienced a little over half this movement, increasing 16 basis points to 5.40%.
Mortgage rates are now just below the highs from mid-June. Some of this can be attributed to seasonal trends as summertime is known for bringing strong gains followed by weakness in the winter months. Another factor manifested itself last Thursday when bonds were quickly sold off in response to market projections of a resilient labor market. The Fed has repeatedly stated they would like to see softened employment (or other economic weakness) before easing up on policy. Unfortunately, their efforts have yet to lead to big traction. Instead, 315K jobs were added in August and the unemployment rate only increased 0.2% to 3.7%. In housing news, rate increases and upward pressure on housing prices have put a dent in buyer demand. As a result, builders have begun to slow down, causing single-family construction to fall 4% in July.