Mortgage rise again for 7 consecutive weeks
Mortgage rates rise again for 7 consecutive weeks and there are no sign of turning backs. Mortgage rates hit record lows in April and it started to take off. Common sense dictates if mortgage rates spike up in a short period of time, they rebound like the stock market. However, that is not the case. Many mortgage loan borrowers have held off locking their mortgage rates in anticipation of them taking a rebound but now are stuck with mortgage rates over 4.0%.
Ben Bernanke speaks out!
After Fed Chairman Ben Bernanke spoke last week, mortgage rates rose to an 18 month high with financial experts predicting higher mortgage rates in the near and distant future.
Mortgage rates rise based on the MBS, mortgage backed securites, are traded on the New York Stock Exchange. Right after Fed Chairman Ben Bernanke spoke last week, Mortgage Backed Securities plumeted 120 basis point which set the biggest single day decrease. Lower Mortgage backed securities prices means higher mortgage rates.
Mortgage Backed Securities And Mortgage Rates
In the past several years, mortgage backed securities have steadily remained high which held mortgage rates low due to the Federal Reserve Board bond purchase program. Due to the Fed bond purchase program, the Federal Reserve Board purchases mortgage backed securities every month. The main reason for mortgage rates rise is because investors were extremely concerned that the Federal Reserve Board will be ending the buy back of mortgage backed securities.
Federal Reserve Board And Mortgage Rates
Federal Reserve Board Chairman Ben Bernanke indicated that the Fed might end the bond purchase program sooner than expected. This sent mortgage rates rising day after day without no relapse. The Fed forecasted economic growth and better unemployment in the near future.
Will mortgage rates rise in upcoming weeks?
Will mortgage rates rise in upcoming weeks? Will mortgage rates drop? A continous rise in mortgage rates will hurt home sales for sure. Many of those who qualify for a particular loan will no longer qualify for the same mortgage amount. The way things are looking is that mortgage rates in the 3.0%’s will soon become obsolete and the new base will be mortgage rates in the 4.0%’s if not the 5.0%’s. For those who have not locked their mortgage rates in the past seven weeks, are now paying the price. Stay tuned!