The war caused a drop in U.S. mortgage rates. The rates went up this week for the first time in nearly two years.
The average rate on the 30-year fixed mortgage went from 4.19% to 3.90% after the Russian invasion of Ukraine.
The crisis caused investors to put their money in the bond market. The yield on the 10-year Treasury does not affect mortgage rates.
As inflation concerns and expected policy changes from the Federal Reserve overrode everything else, bonds sold off and rates moved higher. The average on the 30-year fixed is higher than it was a year ago.
We expect rates to rise over the long-term as inflation broadens and shortages increase. Sam Khater, chief economist at Freddie Mac, said in a release Thursday that uncertainty about the war in Ukraine is driving rate volatility.
That isn't good news for people who are buying a home.
Homebuying competition is picking up as we move closer to the busiest season, according to last week's data. Danielle Hale said that national listing prices, which hit a new all-time high in February, continued to accelerate at a double-digit annual pace.
There is some good news. The inventory of actively listed homes improved for the fifth week in a row.
The buyer competition is getting more intense. After a brief reprieve last fall and this winter, a rising number of homes are selling above the list price.
Mortgage rates are expected to keep rising, but may do so more slowly now.
Matthew Graham, chief operating officer at Mortgage News Daily, said that the silver lining was that the bond market had already done most of the dirty work of achieving the next major high in rates/yields.
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