US mortgage borrowing costs experienced their biggest weekly increase since September as the contract rate on a 30-year mortgage climbed 10 basis points to 6.19% in the week ended March 6, the Mortgage Bankers Association reported on Wednesday. That rise followed two straight weeks that had produced the lowest mortgage rates seen since 2022.
The MBA and market observers linked the increase in mortgage rates to a sharp uptick in the 10-year US Treasury yield. The association noted that the move in Treasury yields occurred as the war with Iran disrupted oil flows and lifted concerns about inflation, a development that tends to push up benchmark bond yields that are correlated with mortgage pricing.
Measures of housing activity in the MBA release offered a mixed picture. The MBA's gauge of purchase applications rose 7.8% in the most recent week - the largest weekly gain since early January. Meanwhile, an index tracking refinancing activity edged higher; the MBA said refinancing volume has risen in all but two weeks so far this year.
Earlier data released Tuesday showed contract closings on previously owned homes increased in February, evidence that the market had been showing early signs of momentum as some affordability constraints began to ease.
The MBA survey, conducted weekly since 1990, collects responses from mortgage bankers, commercial banks and thrifts. The association's data set covers more than 75% of all retail residential mortgage applications in the US, giving it broad coverage of lending flows and borrower demand.
While last week's rate rise interrupted the recent descent in borrowing costs, the MBA data also reflect ongoing strength in purchase demand and steady gains in refinancing activity for most weeks this year. How sustained those trends prove to be will depend in part on Treasury yields and developments related to geopolitical disruptions that are influencing oil flows and inflation expectations.