For the second time in 3 months, mortgage rates saw a slight rise last week to 4.35%, according to Freddie Mac. Since the European Debt Crisis in the spring, mortgage rates have continued to decline as investors have been shifting their funds to safer US Treasury Bonds. As long-term treasury bonds are so closely tied in with mortgage rates, the effect has had a positive response from those looking to refinance.
Yet the new home sales market continues to suffer. Even the record low mortgage rates have been unable to lure in potential homebuyers as the lack of confidence in the national economy rises.
However, improved economic news this month has drawn some money out of the Treasury, which in turn spurred the small jump in mortgage rates. If rates continue to climb, mortgages could become less affordable and signal a stronger economy, according to Michelle Girard, senior economist at the Royal Bank of Scotland.
