Mortgage rates and bonds initially improved as oil prices declined and hopes for progress between the U.S. and Iran increased. However, investors remained focused on inflation, potential Fed rate hikes, and the impact of global events on Treasury yields.
The 10-year Treasury yield climbed above 5%, putting pressure on mortgage rates. Mortgage rates rose to 7.12%, while purchase applications fell 11% year over year. Home values remained relatively stable, increasing 1.41% annually. New home sales, however, rose 6.4% in August, showing some strength in the housing market.
Markets will continue watching inflation, Federal Reserve comments, Treasury yields, and developments involving Iran and the Strait of Hormuz.
Mortgage rates remain under pressure, but stable home values and stronger new home sales show that housing demand has not disappeared. Buyers should focus on affordability and available opportunities rather than trying to time the market.
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