Mortgage rates could move even higher — dealing a fresh blow to home buyers

Mortgage rates have ticked up again, driven by a bond-market selloff that has deepened in recent days. This development is significant for bond investors, as it suggests that the market is repricing its expectations for interest rates and inflation. The yield on the 10-year Treasury note, a benchmark for mortgage rates, has been steadily rising over the past few weeks, and this trend is likely to continue if economic data remains strong.

The impact on home buyers will be a key area to watch, as higher mortgage rates can significantly increase the cost of purchasing a home. With housing affordability already a concern in many parts of the country, further rate hikes could dampen demand for homes and slow down the housing market. This, in turn, could have broader implications for the economy, as the housing market has been a key driver of growth in recent years.

Looking ahead, bond investors will be closely watching upcoming economic data releases, such as the Consumer Price Index (CPI) and the jobs report, for signs of inflation and labor market strength. These data points will help shape expectations for future interest rate moves and influence the direction of mortgage rates. If inflation shows signs of picking up, mortgage rates may continue to rise, putting additional pressure on home buyers and the housing market.

Originally reported by marketwatch.com. BondNews adds analysis for finance & markets readers.