REALTORMag.com reported today that, for the fourth consecutive week, mortgage rates have risen after seeing record lows.
Interest rates for 30-year fixed-rate loans went from 4.46% last week to 4.61%, based on the most recent Freddie Mac survey. In addition, 15-fixed-rate loans averaged 3.96% last week, compared to 3.81% the week before. These rates are at the highest in six month, according to the REALTORMag.com article. Rates for adjustable-rate mortgages also increased.
As mortgage rates go up, yields on government bonds also rise. Investors sell off those bonds, causing their interest rates to go up. A recent Associated Press article suggested that President Obama’s deal with Senate Republicans on postponing tax hikes for the next two years and preserving tax cuts for most Americans.
Economists believe the tax plan will put more money back in Americans’ pockets right away and help the economy get back on its feet. When the economy is stronger, stocks become a more attractive investment than bonds.
The biggest losers, according to the AP article, are those who waited to lock into super-low mortgage rates on their refinancing, thinking rates would fall again. Although these rates are still affordable, they will not be getting that great deal they thought they would be getting.