At least temporarily. The 30-year fixed mortgage rate sits at 5.38 percent this week, down from last week’s 5.59 percent, the highest level in seven months.
As we know, government debt is getting harder and harder to service so they’ve been jacking up Treasury yields in order to attract buyers. Of course, this means the cost of every type of loans, mortgage included, will rise. During the past month, rates jump significantly from well below 5 percent to 4.01 percent last week.
However, as Wednesday’s inflation data showed, there really isn’t anything to worry yet, sending Treasury yields down. The result? Better mortgage rates for consumers.
The mortgage rates are a big issue for everyone, because too high of a rate means that borrowers aren’t able to borrow as much and could slow down or halt the housing recovery that many have hoped for.
I, for one, don’t think it really matters because there’s no stopping the housing slowdown (especially where I live, Southern California). Houses here are routinely in the million dollar range, and with median income never able to afford such a price tag, home prices have no where to go from fall.