Mortgage rates back over 7%, as stronger economic data rolls in

The average rate on the popular 30-year fixed mortgage crossed over 7% Monday for the first time since December, hitting 7.04%, according to Mortgage News Daily.

It comes after the rate took the sharpest jump in more than a year Friday, after the January employment report came in much higher than expected. Rates then moved even higher Monday after a monthly manufacturing report came in high as well.

Mortgage rates have been on a wild ride since the summer, briefly crossing to a 20-year high of 8% in October. Rates then fell sharply, as investors saw more and more evidence that the Federal Reserve would end its latest phase of interest rate increases.

Mortgage rates do not follow the Fed directly, but they follow loosely the yield on the 10-year Treasury, which is heavily influenced by the Fed’s impression of the economy at any given time.

“The rapid increase in rates over the past two days is actually not too surprising given the fact that the market was widely seen as overly optimistic on the Fed rate cut outlook. The Fed has repeatedly pointed to economic data having the final say in that outlook and data has been shockingly unfriendly to rates as of Friday morning’s jobs report,” said Matthew Graham, chief operating officer at Mortgage News Daily.

As mortgage rates fell over the past two months, buyers seemed to be returning to the market. That coincided with a slight uptick in the number of homes for…