On Thursday, mortgage rates overall were reported to have made their largest upward leap in close to four years, and the standard 30-year fixed h ad hit its highest rate since July of last year, CNN and other news report rise in sources.The rates was prompt by a big sell-off of Treasury notes. The Treasury sell-off came in the wake of concerns about inflation and national spending.The national average on a 30-year fixed-rate mortgage rose to 6.74%, up from 6.53% just one week ago. The average fifteen-year mortgage rate leaped from 6.22% last week to 6.44 this week, reaching its highest level since July of last year. "Sharply Mortgage rates moved upward this week, with rates on 30-year fixed-rate mortgages jumping more than 20 basis points, the largest upward movement in over three years, "Frank Nothaft, Freddie Mac chief economist, told MarketWatch.This is the fourth consecutive week that mortgage rates have been on the rise. "These (mortgage rate) moves parallel rising yields on Treasury securities, as concerns about inflation pressures and continuing strength of consumer and business spending have dimmed hopes for an interest rate cut. Higher mortgage rates may weigh on the housing market's gradual recovery. While demand appears to have stabilized, inventories of new homes remain high, putting downward pressure on construction and home prices, "Nothaft said to Reuters.Doug Duncan, who is the chief economist for the Mortgage Bankers Association (MBA), says that he expects mortgage rates to rise to 7 percent or slightly higher by the end of 2007. In the wake of the rising interest rates, the MBA and the National Association of Realtors have now delayed their prediction for a recovery of home prices. New home prices for the first quarter of 2007 were reported to be down Sharply last month, even as new home sales volumes were up. The two industry associations had been expecting a recovery in the summer of this year, but now they are expecting that recovery not to come until sometime next year. Nevertheless, the MBA reported yesterday that home purchases rose to a five-month high and the number of mortgage refinance applications rose substantially over last month. Some Economists speculate that with the continued rise in mortgage rates have suddenly DECIDED buyers to make purchases of homes before the rates go up even higher. "Housing demand is in the process of stabilizing. We have Substantial employment growth that'll support the ability to make purchases. The drag from housing is coming down, "Robert Stein, a senior economist at First Trust Advisors LP in Lisle, Illinois, told Bloomberg.Sources: Bloomberg," U.S. MBA's Mortgage Applications Index Rose 6.6% Last Week, Reuters, " U.S. 30-year mortgage rates highest since July "MarketWatch," Mortgage rates leap on Treasury weakness "CNN, Mortgage rates take biggest jump in nearly 4 years – Jun. 14, 2007
Tags: finance, interest rates
Jordan Warner