Mortgage Rates Climb Further Past 7%

Mortgage rates continued to increase for the fifth consecutive week, with the average rate on a 30-year fixed loan now at 7.16%. That’s more than a half-point higher than during the same time period last month. Adjustable mortgage rates have also risen, with the 5/1 ARM rate climbing to 5.8% — a high since we began collecting this data in January 2022.

Here are the current mortgage rates, without discount points unless otherwise noted, as of March 9:

— 30-year fixed: 7.16% (up from 7.07% a week ago).

— 20-year fixed: 6.97% (down from 7.02% a week ago).

— 15-year fixed: 6.29% (equivalent to 6.29% a week ago).

— 10-year fixed: 6.32% (down from 6.43% a week ago).

— 5/1 ARM: 5.8% (up from 5.68% a week ago).

— 7/1 ARM: 5.93% (up from 5.84% a week ago).

— 10/1 ARM: 6.18% (up from 6.09% a week ago).

— 30-year jumbo loans: 7.26% (up from 7.12% a week ago).

— 30-year FHA loans: 6.27% with 0.05 point (up from 6.2% a week ago).

— VA purchase loans: 6.48% with 0.05 point (up from 6.32% a week ago).

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“Mortgage rates increased again this week as investors continue to reprice inflation and interest rate risk. Despite no major changes to economic conditions, Federal Reserve Chair (Jerome) Powell indicated in his remarks to Congress that the next rate hikes could be higher than what investors are currently anticipating.”

— Orphe Divounguy, senior economist at Zillow

Fed officials are becoming increasingly reliant on incoming economic data to guide the monetary policy decisions that impact just about every American. Fed Chair Powell said so himself during March 8 congressional testimony: “We will continue to make our decisions meeting by meeting, taking into account the totality of incoming data and their implications for the outlook for economic activity and inflation.”

Ahead of the central bank’s meetings, policymakers closely monitor a series of indicators. Here are a few that have been particularly important in recent months:

— On inflation: consumer price index, personal consumption expenditures price index, producer price index.

— On the labor market: Employment Situation (a.k.a. the jobs report), Job Openings and Labor Turnover Survey, or JOLTS.

— On economic activity: gross domestic product, retail sales, consumer spending and income.

This year so far, the data has come in “stronger than expected,” in Powell’s words. If these reports show continued resilience in the face of rapidly rising interest rates, the Fed is prepared to further tighten its grip on the U.S. economy to bring inflation down, even if it comes at the cost of higher unemployment.

“The historical record cautions strongly against prematurely loosening policy,” Powell says. “We will stay the course until the job is done.”

With so much at stake, it got me thinking about these reports: Is the data the Fed relies on really reliable? I first had doubts after the January jobs report, which found that the U.S. economy added an unanticipated 517,000 jobs despite highly publicized layoffs in the tech sector. Economists interviewed by Bloomberg also expressed skepticism about January’s jobs data, calling it “too good to be true.”

Recently, another Bloomberg analysis found that the survey participation rate for these reports has been steadily falling in recent years. In one example, JOLTS is receiving responses from just 31% of participants, compared with around 60% before the pandemic. While the data is still valid, it does raise questions about the future use of these indicators in policy decisions.

For now, all we can do is put these existential concerns on the back burner and try to parse the economic data as it’s published. The markets are keeping a close watch on February’s consumer price index report, which will be released on March 14. The next Fed meeting begins a week later on March 21, and only then will we know if the central bank plans to increase the pace of rate hikes again, and where mortgage rates may be headed next.

[Compare: Mortgage and Refinance Rates in Your Area.]

Indicator of the Week: More Indicators

Not much unlike Powell, I often turn to my own set of housing indicators to make sense of the real estate market. But very much unlike the Fed chair, I don’t have the housing economy hanging on my every word — for which I am grateful.

By analyzing at every data point available, a person could paint a more complete picture of the housing market. There’s such an abundance of real estate research out there, and there’s always a story behind the numbers. For my fellow data nerds, I’ve compiled a list of closely monitored housing market indicators in the table below. Whether you just want to learn something new or you’re thinking about financing your next home, there’s a little something for everyone.

Source	Favorite Indicator(s)	What It Measures
U.S. Census Bureau	New residential construction, housing vacancies and homeownership	Housing permits, starts and completions to forecast future new construction inventory, as well as potential existing home inventory through residential vacancies.
Federal Housing Finance Agency	House price index	Price changes for single-family homes, particularly from an annual standpoint due to the data release delay.
Freddie Mac	Primary Mortgage Market Survey, quarterly economic and housing market outlook	Real-time and historical mortgage rate data, as well as rate forecasts broken down annually and quarterly.
Mortgage Bankers Association	Weekly Applications Survey	Fluctuations in the number of mortgage purchase applications as a measure of homebuyer demand.
National Association of Home Builders	Housing market index	Housing market sentiment and confidence among U.S. homebuilders.
National Association of Realtors	Existing-home sales, pending home sales index	Monthly home price changes as well as contract signings, which is a leading indicator for housing activity.
Realtor.com	Real estate market outlook, market hotness index	Detailed regional market summaries, including inventory and home prices. Especially useful for determining competitive markets.
Redfin	Weekly and monthly market update	Changes in housing trends with a specialization in homebuyer migration patterns.
Zillow	Zillow home value index, Zillow home value forecast, Zillow observed rent index	Comprehensive real estate trends, including sales prices, list prices, for-sale inventory, days on market, price cuts and market rate rents.