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Why Mortgage Rates Jumped This Week
Mortgage rates moved sharply higher over the past week. From September 24 to October 1, the quoted FHA, USDA, and VA rates increased from 6.99% to 7.625%, while THDA moved from 6.375% to 6.5%. Conventional remained at 7.25%.
The primary driver is the bond market. Mortgage rates generally follow the 10 year Treasury yield, which rose as investors reacted to persistent inflation, strong consumer spending, higher energy prices, and expectations that the Federal Reserve may need to keep monetary policy tighter. The Fed recently raised its benchmark rate and reiterated that inflation remains elevated.
For Middle Tennessee buyers: this means less purchasing power and potentially higher monthly payments. A $350,000, 30 year loan moving from 6.99% to 7.625% adds approximately $151 per month in principal and interest. Buyers should update their preapproval, discuss rate lock options, and explore THDA programs or seller funded rate buydowns.
For sellers: affordability pressures may reduce the number of qualified buyers. Accurate pricing, strong presentation, and strategic closing cost or rate buydown concessions can help a property stand out.
Some reference links for the more geeky among us like me:
FreddiMac on Rates
Department of Treasury Daily Rates
Federal Reserve Statement Released 9/16
AP Sermon on rate volatility
Consider me your Realtor and Friend, call or text me anytime if you need me!
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