Mortgage Rates Slip After Recent Surge
Mortgage rates across the country have recently taken a dip after spiking to a three-year high. This shift is drawing out a sigh of relief from many potential homebuyers who were concerned about being priced out of the market. But, what caused the sudden shift in mortgage rates?
The surge in mortgage rates was the result of an unexpected rise in the 10-year Treasury yield – which provides a benchmark for lending rates of mortgage. This rise may have been caused by the positive market outlook, as well as the Federal Reserve’s stance on future interest rate hikes. The surge peaked in November of 2018, with 30-year rates reaching 4.94%.
However, this recent pause in mortgage rate increases comes as somewhat of a surprise to analysts, who had expected the rates to continue to rise. Mortgage applications have decreased as a result of the recent surge, with refinancing applications dropping a significant 7%. Furthermore, mortgage rates are still significantly higher than a year ago – even after the recent dip.
Despite the brief respite, analysts generally agree that mortgage rates are likely to continue on an upward trend. This, combined with the other headwinds in the housing market, could make it difficult for many buyers to find the home of their dreams. It will be important for potential buyers to take advantage of what could be a short period of lower rates.
In conclusion, mortgage rates have recently taken a dip after spiking to a three-year high. This unexpected respite may give potential homebuyers the opportunity to take advantage of lower rates. However, it is important to note that rates are still significantly higher than they were a year ago, and are likely to continue steadily increasing in the near future.