Mortgage rates have jumped to their highest level in three months as U.S. Treasury yields, driven by rising deficits and fiscal policy fears, push the 30-year benchmark above the critical 5% mark.
According to the latest Mortgage Bankers Association report, mortgage application volumes in the U.S. dropped 5.1% for the week ending May 16, the steepest decline in a month.
The drop coincided with the 30-year fixed mortgage rate jumping 6 basis points to 6.92%, marking its highest level in three months.
The rise in borrowing costs tracked Treasury yields higher “with investors concerned about rising inflation and the impact of increasing deficits and debt”, said Mike Fratantoni, MBA’s chief economist.
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Why Are Treasury Yields Rising?
Yields on the 30-year Treasury bond soared to 5.02% on Wednesday, up by over 10 …