Mortgage Rates Jump A Half Percent – from bankrate.com.
The Lawhead Team would like to share an interesting article from Bankrate about the latest trends in mortgage rates. If you are planning to buy, you might want to hurry as interest rates are starting to climb.
June 27, 2013 (www.bankrate.com)
Mortgage rates spiked to their highest levels this week since July 2011, causing frustration among homebuyers and refinancers who were caught by surprise.
How did this happen?
Rates started climbing slowly in mid-May on speculation that the Federal Reserve was preparing to trim the $85 billion-per-month bond purchase program that has long kept a lid on rates. When the Federal Open Market Committee wrapped up its meeting last week, many observers expected the Fed to calm the markets. Instead, the Fed did the opposite.
Mortgage rates shot up once Federal Reserve Chairman Ben Bernanke told reporters that the Fed plans to slow the bond purchases this year and end the program in mid-2014, as long as the economy continues to improve. Even analysts who follow rates closely were shocked at how quickly rates have jumped since then.
“We saw a full percentage increase in less than a month,” says Bob Moulton, president of Americana Mortgage Group in N.Y., adding that half the increase happened since the Fed’s press conference. “My customers are dismayed and disappointed.”
The stock market sank on Bernanke’s comments, and a wave of investors immediately pulled money out of the bond market. When there’s less demand for mortgage and Treasury bonds, mortgage rates tend to rise.
Read entire article on mortgage rates at Bankrate.com
