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Mortgage rates have been rising nonstop since the end of last week. So if you're planning on getting a mortgage, you'd better get moving -- unless you like living on the edge.
Now, I don't want you to panic. But let me give you the facts so you understand why I'm warning you.
The yield on the 10-year Treasury note climbed from 2.01 percent to 2.38 percent in a week. When rates were at bottom, the 10-year yield stayed below or close to 2 percent. It's been five months since the yield reached the high its at now.
Mortgage rates normally follow the direction of bond yields. Freddie Mac's required net yield also is an indication of where rates are headed. And right now, they are headed up. Freddie's yield rose from 3.36 percent to 3.63 percent in a little more than a week.
If yields continue to rise, the 30-year fixed could climb up to 4.5 percent or even 5 percent pretty soon, my sources tell me. That would be a significant jump if you look back three weeks ago, when the 30-year rate was 4.1 percent, a record low in Bankrate's weekly survey.
Why are rates creeping up? Investors seem to believe the economy is strengthening, so they are dumping the safety of bonds and going for the real thing: stock and equity investment. They are riskier, but the returns are higher.
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