Mortgage News Daily reports that the 30-year-old fixed mortgage rate just surpassed 5% and is now at 5.02%. It is only the second time that it has exceeded this threshold since 2011. Today, it was at 3.388%. 

The yield on the U.S. 10 year Treasury is closely followed by mortgage rates. Mortgage rates have risen since the beginning of the year partly due to Federal Reserve policies to reduce inflation and the economic chaos caused by the Russian invasion.

Bonds were already having a rough morning, but then comments from Federal Reserve Vice Chair Lael Brainard that the pace of the Fed’s balance sheet reductions would be significantly bigger than last time and that the maximum pace of reductions would be achieved significantly sooner hit bonds hard.

Matthew Graham is chief operating officer of Mortgage News Daily. He stated, “To hear Her speak about Bond-buying Adjustments in such blunt and urgent terms for the market is unsettling with just over 24hrs to go before the Minutes from the Most Recent Fed Meeting.” “Traders take Brainard’s remarks to mean that they foreshadow an unpleasant conversation on bond buying in the minutes.

Homebuyers are already in the worst housing market since recorded history and higher interest rates will only make it worse. CoreLogic released a report this morning showing that prices rose by 20% in February compared to a year earlier. This is the 12^ThAn annual increase of 1% every other month.