Bonds may have stagnated, but that has not stopped mortgage rates from reaching their highest point since March of 2017. Freddie Mac reported 30-year fixed rates reached 4.15% the week of January 25. 15-year rates jumped 13 basis points and the 5-year hybrid ARM mortgage rate increased .06%. These rate increases have a mild impact on mortgage prices. For example, the .11% interest hike would increase the mortgage of a $300,000 house by $15 per month. It should be noted these rates do not include the fees associated with obtaining a mortgage.
The rate hikes are partially attributable to investors selling the notes at a higher rate, as inflation is expected to grow stronger and the economy is expected to grow at a faster rate than in the recent past. The note sales increased after comments by Treasury Secretary Steve Mnuchin about weakening the dollar as an economic strategy. Although this has not negatively impacted the market, sales slowed in December 2017 due to demand for homes outpacing the supply of available homes.