The stock market has not fully recovered, yet mortgage rates are trending up, what are the reasons?

The mortgage market has enjoyed rates near five year lows. In mid January the yield on the ten year bond touched 3.33%, its lowest level since July of 2003. Since reaching that level the yield has steadily moved up to almost four percent. What we know is that when there is a perception of risk in the market most investors jump into more secure investments such as bonds. The stock market has slowly begun to recover from its early sell off this year. Their was a recent economic stimulus package that has been passed and their is a lot of money that is simply sitting on the sidelines waiting for a market recovery. The recent spike in inflation has been a fundamental driver in increasing the yield on the ten year bond and oil prices are hovering near $100 per barrel, all of which are taking a toll on mortgage rates. Fixed mortgage rates have moved closer to 6%, but still remain near historical lows and could drop again if the economy is slow to recover © LowRateMortgage.com 2-20-2008

 

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