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    Mortgage Rates Surge to Highest Level Since November, Impacting Home Sales


    Mortgage rates in the US surged to their highest level since November this week, as the Federal Reserve’s efforts to combat inflation and a tighter labor market have pushed borrowing costs higher.[0] The 30-year fixed rate mortgage jumped 23 basis points to 6.62%, while the 20-year fixed rate mortgage rose to 6.5% and the 10-year fixed rate mortgage increased to 6.0%.[1]

    The increase in mortgage rates has put many homebuyers back on the sidelines, especially first-time homebuyers who are most sensitive to affordability challenges and the impact of higher rates.[2] A gauge of US home-purchase applications tumbled last week to the lowest level since 1995, as the highest mortgage rates in three months hammered a housing market struggling to stabilize.[3]

    The Federal Reserve has been hiking its benchmark rate to tamp down on inflation, and has already lifted the benchmark federal funds rate eight consecutive times.[4] The Fed’s decision to raise the federal funds rate by 0.25% on February 1 after its latest meeting suggests that inflation may be cooling and the central bank may be able to ease up on its rate hikes.[5]

    The yield on 10-year US Treasury bonds is closely associated with mortgage rates, which are determined by a mixture of expectations concerning the Fed's decisions, the Fed's actual actions, and the responses of investors. Treasury yields and mortgage rates have a reciprocal relationship; when yields increase, so do mortgage rates and when yields decrease, mortgage rates typically follow suit.[6]

    The 10-year Treasury yield, which typically influences the direction and size of mortgage rate movements, was 3.922% as of Wednesday, representing a month-to-date gain of 0.395 percentage point, according to Dow Jones Market Data.

    Mortgage rates can be unpredictable, as they can change without being affected by other economic indicators.[7] Home sales declined for the 12th month in a row, and January data shows existing-home sales across the US have retreated for the 12th straight month, though at a slower pace.[8]

    Rate dispersion increases as mortgage rates trend up, meaning that home buyers can potentially save $600 to $1,200 annually by taking the time to shop among lenders to find a better rate.[9] Using a mortgage calculator can also help buyers to estimate their monthly mortgage payment based on their interest rate, purchase price, down payment and other expenses.[10]

    0. “Mortgage apps plunge as rate jump puts buyers “on the sidelines”” Axios, 22 Feb. 2023,

    1. “Savings window opens: Today's 20-year mortgage rates edge down | Feb. 23, 2023” Fox Business, 23 Feb. 2023,

    2. “Mortgage rates surge closer to 7%” Yahoo News, 23 Feb. 2023,

    3. “US Home-Purchase Applications Drop to 28-Year Low as Rates Jump” Yahoo! Voices, 22 Feb. 2023,

    4. “Home purchase applications plunge to 28-year low as mortgage rates jump” Fox Business, 22 Feb. 2023,

    5. “Mortgage Rates for Feb. 23, 2023: Rates Move Higher” CNET, 23 Feb. 2023,

    6. “Today's Mortgage Rates & Trends – February 23, 2023: Rates mixed” Investopedia, 23 Feb. 2023,

    7. “Inflation Seems to Have Peaked. Can the Same Be Said for Mortgage Rates?” The Motley Fool, 22 Feb. 2023,

    8. “Freddie Mac – Mortgage Rates Rise Again; Hit Highest Level of 2023” News, 23 Feb. 2023,

    9. “Mortgage rates rise for third week in a row, returning to highs seen in November” MarketWatch, 23 Feb. 2023,

    10. “Today's Mortgage Rates: February 20, 2023—Rates Jump Up Again” Forbes, 20 Feb. 2023,

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