The 30-year fixed mortgage daily index from Mortgage News Daily rose to 7.61% on October 5, marking a peak for this cycle; it was 7.59% on October 7, and the daily reading fell back to around 7.55% to 7.50% on October 8. The 52-week low was 5.99%, and the high was 7.61%.

Other surveys from the same site reported lower and slower rates. Freddie Mac's weekly survey showed a rate of 7.40% on October 8, up from 7.28% the previous week and 7.03% the week before that; a year ago, it was around 6.30% to 6.34%. The 15-year fixed rate for the week was 6.73%, up from 6.60% the previous week. The Mortgage Bankers Association reported a rate of 7.30% for the week ending September 30, with points at 0.75, up from 7.12% the previous week. The daily index does not include points, while the weekly survey includes loan application samples, so the 7.6% is the daily quote threshold, not Freddie Mac's weekly average.

The upward trend has been concentrated over the past month. Freddie Mac's 30-year rate rose from 6.71% on September 3, to 6.76% on September 10, 6.95% on September 17, 7.03% on September 24, 7.28% on October 1, and 7.40% on October 8, an increase of about 0.69 percentage points over the month. The daily index fluctuated between 7.54% and 7.61% during this period.

The rates correspond to new qualified loan quotes, not existing mortgage contracts. Borrowers who locked in low rates from 2020 to 2021 have not had their contracts modified; the rates being quoted are for new applications, refinancing, and home purchases. The Jumbo daily index has been around 7.65%, higher than qualified loans.

This round of rate increases aligns with expectations for the federal funds rate. The minutes from the September meeting indicated that there may be another rate hike this year, and regional Fed officials have placed further tightening in the coming months. Mortgage rates are not directly set by the federal funds rate but are determined by the yield on mortgage-backed securities relative to Treasury bonds; short-term rate hike expectations first raise Treasury yields, which then influences loan quotes.

Buyers are locking in shorter durations and are unwilling to take on 7.6% mortgage-backed securities, as well as homeowners holding low-rate existing loans who refuse to sell. Sellers are first-time homebuyers and movers who must apply for new loans at current quotes. Beneficiaries are mortgage servicers continuing to collect spreads on low-interest existing assets; those under pressure are builders, brokers, and refinancing channels relying on new construction and transaction volumes.

Source: Public Information