Mortgage Rates on the Rise
10/26/2005
Another strong day of selling in U.S. Treasury securities on Wednesday sent prices plunging and yields, which move in the opposite direction of prices, soaring. As a result, the rate on the 30-year fixed closed in on 6 percent, its highest level since June 2004, according to records kept by Interest.com. While rates hit a new high for the year, the reasons for another sell-off were old. Traders are focused on the threat of inflation and the rate hikes that will be enacted to keep it at bay.
The only news released on Wednesday came from the Mortgage Bankers Association, and it had no effect on the markets. The report, however, showed that higher mortgage rates had a negative effect on mortgage applications. For the week ended Oct. 21, applications to purchase fell 7.4 percent, while refis dropped 8.5 percent, accounting for 42.5 percent of all mortgage applications.
At 4 p.m. EDT, AVERAGE mortgage rates (zero discount points) based on rates collected nationwide were:
The 30-year Conventional Fixed-Rate Mortgage was at 5.941 percent from 5.865 percent at Tuesday's close.
The 15-year Conventional Fixed-Rate Mortgage was at 5.52 percent from 5.454 percent at Tuesday's close.
The huge rise in yields this week will continue to put pressure on mortgage lenders. It is likely that rates will keep moving up as long as yields do.
Another strong day of selling in U.S. Treasury securities on Wednesday sent prices plunging and yields, which move in the opposite direction of prices, soaring. As a result, the rate on the 30-year fixed closed in on 6 percent, its highest level since June 2004, according to records kept by Interest.com. While rates hit a new high for the year, the reasons for another sell-off were old. Traders are focused on the threat of inflation and the rate hikes that will be enacted to keep it at bay.
The only news released on Wednesday came from the Mortgage Bankers Association, and it had no effect on the markets. The report, however, showed that higher mortgage rates had a negative effect on mortgage applications. For the week ended Oct. 21, applications to purchase fell 7.4 percent, while refis dropped 8.5 percent, accounting for 42.5 percent of all mortgage applications.
At 4 p.m. EDT, AVERAGE mortgage rates (zero discount points) based on rates collected nationwide were:
The 30-year Conventional Fixed-Rate Mortgage was at 5.941 percent from 5.865 percent at Tuesday's close.
The 15-year Conventional Fixed-Rate Mortgage was at 5.52 percent from 5.454 percent at Tuesday's close.
The huge rise in yields this week will continue to put pressure on mortgage lenders. It is likely that rates will keep moving up as long as yields do.
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