Interest rates have increased 37 basis points since the calendar was flipped along with rising government bond yields for 2021.
While the pace slowed after last week's 16-point surge, the average 30-year fixed rate rose to its highest level since July 2020, according to Freddie Mac's survey of the primary mortgage market.
The average rates for the 30-year FRM have exceeded the 3% threshold and have increased from 2.97% compared to the previous week to 3.02%. However, it remains below the rate of 3.29% compared to a year ago.
The hikes have noticeably suppressed recent borrower applications, but further growth is likely to slow at the beginning of the typical high home buying season, said Sam Khater, Freddie Mac's chief economist.
"While activity remains high, it is currently at the pre-pandemic level in early March," Khater said in a press release. "However, the rise in mortgage rates over the next few months is likely to be more subdued than in recent weeks and we expect a strong spring sales season."
The average for the 15-year FRM was 2.34% from last week and stayed well below the 2.795 year-over-year figure. The five-year Treasury-indexed hybrid floating rate mortgage fell 26 basis points to an average of 2.73% from 2.99% and 3.18% year over year.
The improving economy, led by the gradual impact of vaccine distribution, will keep upward pressure on interest rates. But there are other factors that will weigh on future interest rate movement, according to Zillow economist Matthew Speakman, who made comments Wednesday night.
"The pace of this upward momentum is far from certain – negative pandemic-related developments or surprisingly low employment numbers in February are two factors that could keep mortgage rates in check or even push them back down." Said Speakman.