Mortgage Rates Hit Highs

With the Fed steadily raising long-term interest rates, we're finally starting to see an uptick in mortgage rates. From Mortgage Rates Hit Highs

Mortgage rates rose again this week with 30-year mortgages hitting their highest level in four months and one-year adjustable rate mortgages rising to the highest level in more than three years. In its weekly survey, mortgage giant Freddie Mac reported Thursday that rates on 30-year, fixed-rate mortgages rose to a nationwide average of 5.89 percent, up from 5.82 percent last week. For oneyear adjustable rate mortgages, rates rose to 4.57 percent, up from 4.47 percent last week.

As mortgage rates continue to rise the cost for speculators will increase. Too, those with adjustable rate mortgages have more to fear once their fixed, introductory period ends. Right now it's painfully clear that home prices in many markets are simply out of line. As I blogged about earlier, the mortgage-to-rent ratio is out of whack, as are the income-to-mortgage ratios. Clearly something has to give, but what will precipitate this necessary change? Interest rates may be one such triggering factor. Only time will tell, but the higher the mortgage rates rise, the less interested buyers will be and the more in trouble those with ARMs will find themselves in.