Mortgage rates climbed higher on Wednesday, May 20, with lenders raising the average rate by three basis points. This continues a pattern of steady increases that affects anyone shopping for a home or refinancing an existing loan.
The 0.03 percent jump keeps pressure on borrowers entering the market. Higher rates mean larger monthly payments on new mortgages. A borrower financing $300,000 at a rate 0.03 percent higher than yesterday pays roughly $10 more per month, which compounds to $120 extra per year.
What's driving the move. Mortgage rates track the 10-year Treasury yield closely. Recent economic data, inflation reports, and Federal Reserve signals all influence Treasury prices throughout the day. When investors demand higher returns from government bonds, mortgage lenders pass those costs to homebuyers and refinancers.
What you should do now. If you're shopping for a mortgage, lock in a rate before it climbs further. Rate locks typically last 30 to 60 days, giving you time to close without worrying about daily fluctuations. Compare offers from multiple lenders like Rocket Mortgage, Better.com, and your local bank. Even a 0.125 percent difference saves tens of thousands over 30 years.
Refinancers face tougher math. If you refinanced in the past year at historically low rates below 3 percent, today's higher rates make a new refinance less attractive unless you plan to stay in your home long enough to recoup closing costs. Use an online calculator to break even before refinancing.
Renters watching from the sidelines should know that rent often rises when mortgage rates spike. Property owners with higher financing costs raise tenant fees to maintain margins. Locking down a long-term lease now protects you from mid-year bumps.
Builders and real estate agents are already