Despite other indices showing the average 30yr fixed rate in the 6.7 range, the actual average (after accounting for points) is once again over 7%. We were already close as the index stood at 6.91 yesterday afternoon. That means lenders were offering rates in a range between 6.625 and 7.5%, give or take.
Today's index leapt almost immediately to 7.04, meaning lenders are predominantly quoting 7% or 7.125%. At this point, it's good to note that a "point" (1% of the loan balance paid upfront for the purpose of dropping one's rate) goes a longer way than normal these days. At the moment, it would turn a 7.125 rate into a 6.625 rate.
In other words:
7.125% with no points = 6.625% with 1 point.
Whether or not this makes financial sense for anyone's individual scenario, budget, or outlook is a matter of legitimate debate, but points have been more prevalent than historically normal due to their outsized value. That's unfortunate with respect to other rate indices like Freddie Mac's, which no longer takes points into consideration.
So what caused the spike? Economic data! We know the bond market has been hungry for evidence for or against economic resilience. Today's data suggested much more resilience than expected. Thus, bonds sold/deteriorated, and that leads to higher interest rates.