On June 6th, the ten year bond closed at 3.94%, on Friday June 13th, the ten year bond closed at 4.24%. The thirty basis point increase in the bond is one of the fast and largest increases over the course of one week in the past five years. The rapid increase in bond prices has pushed fixed rate mortgage loans up to their 2008 high levels. There is little room for optimism that this trend will reverse course in the near future. Oil prices are closing in on $140 per share and this is having a significant impact on all aspects of the market. The economy is likely to see stunted growth as inflation becomes more prominent and the housing market will certainly suffer as well. Fixed mortgage rates could easily rise above seven percent in the next thirty days if the market does not see a material correction. Home owners who are waiting to refinance until the fall may miss out on rates in the six percent range if oil prices do not stop climbing.

6-16-2008 ©LowRateMortgage.com

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