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Mortgage rates went up this week because of an unexpected resurgence of inflation.The average rate on the 30-year fixed-rate mortgage rose three basis points, to 6.84%, in the week ending Feb. 13, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point. This marked the first rise in the 30-year mortgage rate in four weeks.Rising prices did itBlame the consumer price index. Until the January CPI report was released Wednesday morning, mortgage rates had been drifting slowly downward. But mortgage rates abruptly reversed course after the Labor Department said that core prices were 3.3% higher in January than a year before.January’s 3.3% core inflation rate was higher than December’s 3.2%. Most forecasters had expected core inflation to fall in January, or at least remain about the same.As a result of this unpleasant surprise, the 30-year mortgage jumped about one-eighth of a percentage point from Tuesday to Thursday this week. That two-day increase was enough to pull the entire week’s average upward.Fed rate cuts are on hold, and an increase is possibleThe core inflation rate had been headed mostly downhill in the spring and summer of 2024, and the Fede …
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