An exceptionally hot read on inflation early Wednesday, the government's Producer Price Index, or PPI, sent bond yields higher, and mortgage rates followed. Rates had already been surging higher earlier this week on news of more trouble in negotiations over the Iran war.
The average rate on the popular 30-year fixed mortgage rose Wednesday to 6.57%, according to Mortgage News Daily. It is now 15 basis points higher than it was last Friday, and it is sitting at the highest level since March, when falling rates reversed course due to the start of the war.
Wednesday's increase was much smaller than the jump following another inflation report: the Consumer Price Index released Tuesday.
"PPI, in general, is not as big a deal as CPI," explained Matthew Graham, chief operating officer at Mortgage News Daily. "Bonds are also assuming a corrective drop after the war is over."
The move comes just as the spring market, which stalled in March, was finally beginning to see new life. The National Association of Realtors said data from Sentrilock, which provides the lockboxes real estate agents use on for-sale properties, recorded home showings in April were up 8% year over year. All four regions of the country saw increases.
