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Mortgage rates skyrocket

By Polyana da Costa ·
Wednesday, May 29, 2013
Posted: 2 pm ET

The time refinancers feared may have arrived. Mortgage rates skyrocketed in the past few days, and it looks like they will keep going up.

"Mortgage rates have jumped more in the past week than they have in years," says Bob Walters, chief economist for Quicken Loans.

Why did rates rise so quickly? The Mortgage Bankers Association says, "Rates rose in response to stronger economic data and an increasing chance that the (Federal Reserve) may soon begin to taper their asset purchases."

The 30-year-fixed mortgage has stayed below 4 percent since May 2012, mostly because the Fed has helped keep rates low with its bond-purchasing program. But speculation that the Fed may taper the program soon has put upward pressure on rates.

The yields on Freddie Mac mortgage bonds had jumped to 3.54 percent today, compared to 3.19 last Wednesday. The yields on the 10-year Treasury note jumped from 2.02 percent to 2.15 percent. Rates tend to follow the same direction as these yields.

It is possible they will jump above 4 percent pretty soon.

Stay tuned. We'll keep you posted.

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June 01, 2013 at 5:01 pm

wait till the fed STOPS buying our own bonds....the stock market will crash like never do you think it is so high?..mortgages will be lost like never before...why when i refi my home it was sold to fannie...ALL loans are through the fed..your mortgage is no longer with the big banks..the government owns them...and THAT is how communism will begin..If we dont get the right people in there its over can forget about ever owning much of anything..the value of money is gone, and so is america.

May 31, 2013 at 11:36 pm

Skyrocket? and the evidence is "It is possible they will jump above 4 percent pretty soon"

How silly

May 31, 2013 at 3:59 pm

Yes, people want a return on their cash. Combine this with the shock next year when people do their taxes (with O's goodies finally hitting) and there will be no market between 330k and 5m.

May 31, 2013 at 11:30 am

This translates into lower home prices since buyers will be able to afford smaller mortgages. Buyers beware, it will be a long time before you will be able to sell your home for the price you pay for it. If you're in great financial shape wait for the market to bottom out and buy with cash.

Steve Bilbo
May 29, 2013 at 4:50 pm

Here we go.