Mortgage rates march even higher, reach new 7-year high

Rates for home loans throttled higher, nipping at the heels of a housing market that’s so far managed to absorb pricier financing on top of surging home prices.

The 30-year fixed-rate mortgage averaged 4.66% in the week ending May 24, mortgage finance provider Freddie Mac said Thursday, a jump of five basis points during the week.

The 15-year fixed-rate mortgage averaged 4.15%, up from 4.08%. The 5-year Treasury-indexed hybrid adjustable-rate averaged 3.87%, up five basis points.

Mortgage rates follow the path of the benchmark U.S. 10-year Treasury note but with a slight delay. Investors started selling bonds at the end of last year, believing that the hefty deficits those cuts will bring will prompt more government borrowing.

More recently, investors have focused on inflation, which will erode the value of fixed-income assets as it moves higher. Bond yields have eased off in the past week or so on geopolitical concerns, and mortgage rates could take a breather soon, as well.

The Commerce Department’s report on sales of newly-constructed homes, released Wednesday, suggested that market momentum was pulling back. Some analysts attribute that wobble in part to higher mortgage rates.