Mortgage Rates are Rising. Will Sale of Residences Also Increase?
America is passing through one of the toughest economic times and cheap credit is not attracting many.
It is a moot question if the rise in mortgage rates will give the fillip to increase in sale of residences. It has been seen that the low rates did not help to give a boost to house sales but will the change now make those sitting on the fence plunge into the market?
Rates during the week starting from 6th December surged to the highest point since the last six months after the government agreed to extension of tax cuts for another two years; it included the rich also. The financial markets are still debating on it as to whether it will speed up the recovery or add to the deficit.
Mortgage rates are greatly impacted by the yields on Treasury bonds. The borrowing rates have gone up in the mortgage world. The average rate for a fixed loan of 30 years went up from 4.46% to 4.61%. This is the fourth running month that rates have increased. Freddie Mac notes that the average of 15 year mortgage increased from 3.81% to 3.96%. Since June the rates have been the highest.