Mortgage Rates on the Rise; Repeat of Lead-Up to 2008?78 views 2013-06-18 01:04 Tags: regarding surprise purchase blank selling
One reaction that should not surprise long-term investors is that the market will move far quicker and further than most people expect. Even before the Federal Reserve has made any statement regarding the timing of reducing its asset purchase program, investors have already begun selling their fixed-income investments, which is causing yields to rise.
This is now resulting in higher mortgage rates.
According to the Mortgage Bankers Association, the average for 30-year mortgage rates increased to 4.15% last week, a substantial move from May's average for 30-year mortgage rates, which was approximately 3.59%. (Source: "Mortgage Rates on Six Week Streak Higher," Wall Street Journal, June 13, 2013, accessed June 14, 2013.)
Even though long-term mortgage rates at 4.15% are still near historically low levels, this has impacted refinancing, which will in turn affect certain bank stocks that have benefited from the boom of lower mortgage rates.
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