A three-week rate reprieve for aspiring US homeowners just came to an end.

After flirting with a six-handle, the 30-year fixed rose for the first time in nearly a month on the MBA’s index, Wednesday’s update showed.

Rates were up four basis points to 7.05%. The index hasn’t dipped below 7% since the first week of April.

Although nearly a full percentage point off the late-October peak, rates have proven more stubborn than many housing market aficionados expected in 2024.

Somewhat ironically, Americans struggling to make the math work on a home purchase need the economy to falter, even as middle- and lower-income households would be the first to suffer in a downturn. The resilient economy’s pushing out Fed cuts and putting a floor under Treasury yields, which in turn limits the scope of any mortgage rate relief.

Overall mortgage application activity was the slowest since March headed into Memorial Day weekend, the MBA said Wednesday. “Borrowers remain sensitive to small increases in rates,” Joel Kan remarked.

Three consecutive auction tails helped push Treasury yields markedly higher mid-week. At 4.61%, 10s were the cheapest since May 1. Key macro data due Thursday and Friday could blunt the bearish momentum. Or add to it. If the selloff holds, mortgage rates will be higher a second week.

It’s worth briefly mentioning a Bloomberg-commissioned survey which showed 70% of US ARM holders are “at least somewhat concerned” about the prospect of higher payments on the reset given the run-up in rates over the last two years. Obviously, ARMs are a very small share of the US market, but Bloomberg counts 1.7 million originations since 2019, around 25% of which have either reset or are about to.

The same linked article was keen to note that ARMs’ dollar-value share of the market is much higher than their share of total loans because the average loan size is triple that of the typical fixed-rate mortgage. Some borrowers with ARMs could see their payments “almost double,” one industry participant noted.

Don’t feel too bad for those borrowers, though. They’re typically rich (“affluent,” as Bloomberg put it) and can generally make the larger payments simply by cutting back on their lifestyles. Tragic though that’d be.