Earlier this week, while editorializing around what I (maybe hyperbolically, maybe justifiably) described as an “awful” read on new residential construction in the US, I noted that according to Redfin, monthly housing costs for Americans hit yet another new record earlier this month.

That observation, in turn, prompted me to not-so-gently note that “thanks” to the run up in bond yields since last week’s CPI overshoot (more than 20bps on the 10-year if you’re keeping track at a home you’re golden-handcuffed to) very likely meant mortgage rates would hit a new YTD high if they hadn’t already.

Fast forward a day and sure enough, the MBA said rates rose sharply for a second week, reaching 7.13% in the process. That’s a new 2024 high.

As the figure shows, the two-week cumulative increase (22bps) is among the largest since October, when rates flirted with 8% at the tail-end of an acute term premium re-pricing that drove bond yields to cycle highs and unnerved Janet Yellen.

MBA VP Joel Kan cited “incoming data indicating the [US] economy remains strong and inflation is proving tougher to bring down.”

At least some buyers were undeterred, though. Application activity actually picked up over the week. It’s “possibl[e],” Kan ventured, that “some borrowers decided to act in case rates continue to rise.”

Not to put too fine a point on it, but that seems to suggest high rates — and particularly the prospect of even higher financing costs going forward — are actually facilitating inflation to the extent the panic to lock is pulling forward demand into the spring FOMO thaw.

An update on existing home sales, due later this week, will be instructive. It’ll be stale too, but instructive all the same.

Meanwhile, 38% of renters now say they’ll probably never own a home, according to a Redfin-commissioned poll of 3,000 Americans. That’s up 11ppt in the short space of a year.