Mortgage rates spike as bonds fall

With more resilient home sales data the bonds are dropping hard for a second straight day. Mortgage interest rates are closely related to the 10 year treasury bond which fell again pushing interest rates up sharply.

Combine this with strong consumer spending numbers in November and the result is rates were shifted about .125% - .25% higher over the last week. Accordingly, mortgage applications fell 14% in the same week with refinances down 18%.

There is some encouraging news from the resale side if the real estate front. Inventories are down due to the low interest rates we have had the past few months so it appears as though the bottom may be coming very near. However, with the weakening of the dollar abroad we should keep a watchful eye on values and be cautious for the next 6 months.

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