Mortgage rates climb on day Dow reaches 20,000
Holden Lewis of Bankrate.com reported on the impact of the DOW on mortgages and the affects it will have on the real estate market going forward. Mortgage rates rose for the first time this year as the Dow set a milestone by nudging above 20,000.
Lewis reported that rates on mortgages had declined three weeks in a row. But the streak was snapped as investors went on a shopping spree for stocks. Bond prices sank, and that sent bond yields and mortgage rates soaring.
“The Dow crossed over the 20,000 mark. So that’s kind of a psychological thing,” says Elizabeth Rose, branch manager for Movement Mortgage, in Dallas. “I think what we’re seeing is kind of a continuation of the (Donald) Trump rally. … It’s mostly a continuation of excitement and confidence of the business community and where business is headed.”
She doesn’t intend that as a political statement. Rather, it’s an explanation for the bullish attitude among business leaders.
“Whether it’s controversial or not, if it’s deemed positive for the business community,” she says, we could see lower bond prices along with higher mortgage rates and stock prices
Mortgage rates this week
The benchmark 30-year fixed-rate mortgage rose this week to 4.32 percent from 4.18 percent, according to Bankrate’s weekly survey of large lenders. A year ago, it was 3.94 percent. (information provided in Lewis article)
A bet on infrastructure
Stock prices have been rising since the election of Donald Trump, on the theory that with a Republican in the White House, GOP members of Congress will finally approve infrastructure spending that will stimulate the economy.
Stocks and mortgage rates aren’t the only financial numbers that are rising. House prices are going up, too. Prices for home resales rose 6 percent in 2016, according to the National Association of Realtors. In December, the home resale median price — half sold for more — was $232,200.
With house prices and mortgage rates rising, it’s important to keep things in perspective, Rose says.
“Rate are still historically low,” she says. “Even though they’re rising, they’re rising within a historically low range.”
In Bankrate’s weekly survey, the 30-year fixed has averaged 6.18 percent in the last 25 years.