Mortgage rates are based on movement in the bond market, and bonds have lost ground every day for 8 straight days.  Today was merely the latest in that losing streak.  

The weakness was in place from the outset, but it was modest at first.  The average mortgage lender was only 0.02-0.04% higher in rates versus yesterday in effective terms (mortgages are typically offered in 0.125% increments with fine-tuning adjustments seen in closing costs.  "Effective rate" is a term that translates the closing cost changes to a hypothetical interest rate). 

At that time of day, lenders (and everyone else for that matter) was waiting to hear the scheduled policy statement from the Federal Reserve.  It was a foregone conclusion that the Fed would hike its policy rate by 0.25%, but other details were a bit of a moving target.  Specifically, this was one of the 4 meetings per year where the Fed publishes updated projections for the Fed Funds Rate (that's the thing everyone is talking about when they reference hikes or cuts).  

The Fed Funds Rate doesn't have a direct bearing on mortgages or other long term rates, but the outlook for future Fed hikes/cuts can certainly have an impact.  The market was well aware that Fed members would be expecting significantly higher rates than the last round of forecasts showed in December.  When the new forecasts showed a median expectation for SEVEN hikes in 2022 (as opposed to the 5-6 that the average market participant expected), bonds responded with a sharp rise toward higher yields/rates.

Most mortgage lenders recalled the day's initial rate sheets and "re-priced" with less favorable terms.  Conventional 30yr fixed rates for top tier scenarios are up to 4.5% in many cases although the timing and magnitude of rate changes vary widely from lender to lender.  As this is a general rate article that draws on data from multiple lenders, the best way to use  it is to focus on the change from certain points in the past.  So here you go:

Rates are UP:

more than a quarter point this week,

more than half a percent from the lowest levels in March following the onset of the Ukraine war,

almost 7/8ths of a point since Feb,

1.25% so far in 2022,

and almost 1.75% from the lows of last summer.

Even before today (but especially after), this is the sharpest move higher in rates in more than a decade.

Why have rates been rising so quickly?  First off, they were always destined to rise as the world moved past the brunt of the pandemic.  That may have been a more orderly process, but unexpectedly relentless inflation and an abrupt passing of the omicron surge increased the Fed's sense of urgency.  It was already talking about removing rate friendly policies in Q4 2021, but that removal accelerated immensely as the new year began. 

Then the war in Ukraine added major fuel to inflationary fires due to its effect on oil and other commodities prices (inflation is bad for bonds/rates).  The Fed had a choice today to focus on the global economic uncertainty created by the Ukraine situation or to reiterate its fear/respect of the associated inflation implications.  It chose the latter, and that likely added even more urgency to the upward pressure on rates and the robust rate hike outlook for the remainder of 2022.