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Mortgage Rates on the Rise

Mortgage rates are on the rise. In fact, they are rising at the fastest rates since last June, and are at 4 year highs. This looks to be a continuing trend for 2018, as rates are expected to continue their upward trajectory.

So why the reason for the rate increase? Bond prices are declining, as the supply of available bonds are outpacing demand. As bond prices fall, rates go up. Part of this is due to projected revenue loss form the recently passed tax reform. The Treasury must issue new bonds to offset the lost tax revenue. More bonds and less bond demand is driving rates up.

Another reason for the recent move has to do with the recent weakness of the US dollar. While not as big of an impact as the news may have lead you to believe, there is certainly some correlation of the two.

There are many other economic indicators will will push rates up and down. We always try to look at the big picture, and look for the trend. This puts us in the best position to advise our clients. Right now, that trend is up, and I don;t see that changing anytime soon.

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