Anyone Notice The Slight Jump Up In Mortgage Rates?

Is the price of money going up?

Is this a sign of things to come? Recently we’ve seen a slight rise in rates for a 30 year fixed mortgage. After a steady decline and run at historically low levels it has turned upwards for the first time since anyone in real estate can remember. This could prove to be another challenge in the path of recovery for the real estate market in our country.

The main reason for the increase on the rates is the close following between the 30 year rate and the 10 year treasury bond yield. As one moves up or down so does the other but the cause of this rise is something different. This is due to an opposite relationship between the price of the bonds and their yield. As bond prices rise yields go down and vise versa. Recently we’ve seen a decrease in bond prices thus resulting in an increase in yields thus the increases in both yields and 30 year fixed rates.

The Federal Reserve is taking measures to prevent more increases in 30 year fixed mortgage rates as this would make housing less affordable which could prolong the recovery of the real estate market which suffered one of the worst collapses in history. One thing is for sure, no one can predict the future and this means that for those buyers that have sitting on the fence for what ever reason this might be a sign that it’s time to move forward and lock in a great rate while they still can.