In the last two weeks rates have been on the move.. and the move is up.. On May 29,2007 rates were Holding at 6.125% for a conforming loan ( loan amount under $417,000) and 6.250% for jumbo loans.
Today rates have jumped significantly with conforming loans at 6.375 and jumbo loans at 6.625% and this is just the beginning of the week. Lots of economic news coming out this week that will definitely affect bonds along long term mortgage rates. Even a whiff of inflation could scoot up rates even higher in response to the Bond market.
For consumers it means higher mortgage payments on adjustable rate loans. This could spell real trouble for people who have a loan that will be adjusting this year from a fixed rate to a variable rate.
It was about this time last year that rates began the upward dance that seemed to cool the market until the end of the year when rates dropped. We could be seeing a repeat of last years rates that inched up toward 7%.
Much will depend on what news comes from some of the major reports that are due this week. If inflation is sighted or if retail sales show that buyers are picking up a lot more durable goods we could see bonds drop and rates shoot up. So hang on to your hats just in case it turns out to be a bumpy ride over the next few months.
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