The hike in the closely watched interest rate is making it even more expensive for consumers to buy homes. U.S. home prices rose 20% in February from a year ago, CoreLogic said in a report Tuesday.
The 5.02% 30Y FRM rate is more than 1 percentage point higher than the 3.38% average a year ago. That also means consumers will be less likely to refinance their existing mortgages.
Mortgage servicer stocks New Residential Investment (NYSE:NRZ -1.0%), Ocwen Financial (NYSE:OCN -5.5%), Mr. Cooper (NASDAQ:COOP -2.5%), and PennyMac Financial Services (PFSI -2.5%) are falling in midafternoon trading on Tuesday. Most mortgage REIT shares are also in the red — iShares Mortgage Real Estate Capped ETF (REM -0.9%). Homebuilders are drifting down: D.R. Horton (DHI -1.7%), KB Home (KBH -2.1%), PulteGroup (PHM -1.2%), and Toll Brothers (TOL -1.2%).
Last week, Freddie Mac reported that the average 30Y FRM was 4.67%, up 25 basis points from the previous week.