The stock market rose above 13,000 for the first time since January. This is a key figure as we assess where mortgage rates are heading for the month and balance of the summer. Mortgage rates have slowly risen since bottoming out earlier this year. Fixed mortgage rates are now above six percent for all thirty year loan programs and are closing in on six percent for fifteen year loans. The increase in rates can be attributed to more investors pulling their money out of safer bond instruments and into the equity market. The market is also under pressure from the rapid increase with oil prices as this is adding extra inflation pressure onto bond yields. The month of May could be a critical month to determine where mortgage rates move for the balance of the year. Most of the factors that are influencing the market are working in favor of rates moving up for the month. The jobs report for April was better than expected and their will be an influx of cash in the market as tax rebate checks begin to be dispersed. Mortgage rates are not likely to skyrocket but could slowly move up .25-.5% this month with some occasional dips on economic news.

5-2-2008©LowRateMortgage.com

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