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December 9th, 2010 (Modified on December 14th, 2010)

Why are mortgage rates rising?

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int rate QMark By now you know that mortgage rates are rising — three out of our four blog posts this week discussed the fact. Amy Hoak of MarketWatch.com just wrote an article titled “Mortgage rates jump to six-month highs.”

But, why are mortgage rates rising? There’s not just one answer, there are a couple other factors in play:

1. If the economy is really starting to improve, and with the Fed’s QE2 program expected to help it improve some more, we could be in for a much firmer recovery than was expected just a couple of months ago. The result: higher rates.

2. There was a lot of new Treasury supply hitting the market this week, explains HSH.com’s VP Keith Gumbinger, which met tepid demand (probably due to investors looking to lock in positions/gains for the end-of-year period.

3. Simply stated: there’s more certainty than before. Now that the Congressional elections have passed, some political uncertainty has dissipated along with the elections.

“With some greater certainty comes greater clarity and confidence about the durability of the recovery, and investors seem to be shifting at least some holdings out of ’safe haven’ spots in favor of other opportunities (stocks, oil, gold, etc.),” explained Gumbinger.

Looking for a long-term forecast for mortgage rates? If so, check out HSH.com’s “Two-month forecast for mortgage rates.”

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2 Responses to “Why are mortgage rates rising?”

  1. Tweets that mention Why are mortgage rates rising? | HSH Financial News Blog -- Topsy.com Says: December 9th, 2010 at 8:44 pm

    [...] This post was mentioned on Twitter by HSH Associates and Joel Lobb, Mysteriously Unnamed. Mysteriously Unnamed said: [HSH] Why are mortgage rates rising? – By now you know that mortgage rates are rising three out of our four blog po… http://ow.ly/1anKHM [...]

  2. Mortgage Menders » Why are mortgage rates rising? | HSH Financial News Blog Says: December 10th, 2010 at 6:06 pm

    [...] Why are mortgage rates rising? | HSH Financial News Blog [...]

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

Our bloggers:

Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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