However, the war-induced decline in U.S. home mortgage rates was temporary. The rates rose this week to their highest levels in two years. 

Mortgage News Daily reports that the 30-year fixed-rate mortgage was at 4.19%, but fell to 3.9% after the Russian invasion.

Investors fled to relative safety in the bond markets after the global financial crisis that rocked the world’s financial markets. Loosely, mortgage rates are the same as the yield from the 10-year Treasury.

Inflation concerns and anticipated policy changes by the Federal Reserve overtook all else. Bonds were sold and rates rose. It is now at 4.28% on the 30-year fixed, which is almost a percentage point above it was one-year ago.

We expect rate rises as inflation increases and more people are affected by shortages. In a Thursday release, Sam Khater (Freddie Mac chief economist) stated that rate volatility is being driven by uncertainty over the conflict in Ukraine.

This is bad news for homebuyers who face the most expensive and tightest housing market ever.

The data from the last week shows that competition for homebuyers is increasing as we get closer to peak season. Danielle Hale is chief economist for Realtor.com. “The national listing price rose to a record high of $23,099 in February.”

However, there are some positive signs. There is good news. Last week, inventory of actively listed homes saw its fifth consecutive week of improvement.

The competition for buyers is increasing. After an initial respite in the fall and winter of last year, homes continue to sell at or near their list prices.

Although mortgage rates will continue to rise, it is possible that they might increase more slowly in the future.  

Matthew Graham, Chief Operating Officer at Mortgage News Daily said that “the silver lining (from a prediction perspective) is that the bond markets have probably already done most of the dirty work in achieving the next major peak in rates/yields.”  “It’s worth noting that the current rate spike is less than half a percent from being as big as the 2016-2018 rate spike – the biggest one we’ve had since the 1990s.”