Mortgage Rates on the Rise

USA Today reported that mortgage rates are rising and if you have checked recent mortgage websites you’d see the changes for yourself. WASHINGTON (AP) — The nationwide average rate on a 30-year fixed mortgage rose for the third straight week May 23, hitting their highest levels since mid-March.The Fed has been buying treasuries for over three years now to keep rates lower and boost the not only the housing market but also the economy. It’s only reasonable that this can’t continue forever, considering the fiscal problems in Washington. The average on the 15-year loan jumped to 2.77%, up from 2.69% last week. The record low of 2.56% was hit on May 2. Moreover, as the economy improves investors are more likely to purchase equities versus MBS (mortgage backed securities) the driver of how the mortgage market trends.As investors, and traders get more comfortable with the economy as a whole their likelihood of staying conservative in treasuries weakens into more aggressive strategies. Thus they pull capital out of MBS and into stocks, and equities resulting in higher mortgage rates.Mortgage rates rose sharply this week because they tend to track the yield on the 10-year Treasury note.The yield rose above 2% Wednesday for the first time since March 14 and was at 2.02% Thursday. Investors began selling government bonds Wednesday after minutes of the Federal Reserve’s last meeting showed several policymakers favored slowing the Fed’s bond purchases, perhaps as early as this summer.