Mortgage rates surge to their highest levels in 7 years
CNBC
5/15/2018
- David Hockney painting sells for a record $90.3 million at auctionA painting by British artist David Hockney sold for $90.3 million at Christie’s in New York, a record for a living artist at auction. Image: AFP/Getty
The Wall Street Journal.
- Iconic FAO Schwarz toy store makes comeback to NYCFBN's Lauren Simonetti on toy store FAO Schwarz making its return to New York City.
Fox Business
- FDA proposes banning menthol cigarettesThe Food and Drug Administration proposed a rule Thursday that would ban menthol cigarettes and flavored cigars. CBS News chief medical correspondent Dr.Jon LaPook joined CBSN with more.
CBS News
David Hockney painting sells for a record $90.3 million at auction
The Wall Street Journal.1:03Iconic FAO Schwarz toy store makes comeback to NYC
Fox Business2:06FDA proposes banning menthol cigarettes
CBS News4:37Facebook pushes back against claims in bombshell NY Times report
Newsy2:27Americans with $1M retirement savings at record-high number
GOBankingRates0:59Kim Kardashian and Kanye West reportedly hire private firefighters
CBS News0:31What happens when you procrastinate too much
Business Insider3:22Secret ways to save big bucks on Amazon
Money Talks News1:50
More Americans on the road by Thanksgiving as gas prices drop
Veuer0:55Nordstrom overcharged customers
Reuters1:02Millennials are bringing back the Christmas tree
USA TODAY2:10New styles of fake news advancing on social media worldwide
CBS News3:55Homeless veteran and couple accused of making up story for GoFundMe account
CBS News0:53USPS underdelivers on finances for 12th straight year
Newsy0:56Bernie Sanders targets Walmart, calls for $15 minimum wage
CNBC1:485 red flags when buying a car
USA TODAY2:30
A sharp sell-off in the bond market is sending mortgage rates to the highest level in seven years.
The average contract rate on the 30-year fixed will likely end the day as high as 4.875 percent for the highest creditworthy borrowers and 5 percent for the average borrower, according to Mortgage News Daily.
Mortgage rates, which loosely follow the yield on the 10-year Treasury, started the year right around 4 percent but began rising almost immediately. They then leveled off in March and early April, only to begin rising yet again. Tuesday's move follows positive economic data in retail sales, suggesting that newly imposed tariffs would not hit sales as hard as expected.
Rates have been widely expected to rise, as the Federal Reserve increases its lending rate and pulls back its investments in mortgage-backed bonds. But mortgage rates have reacted only in fits and starts.
"The bottom line is that the writing on the wall has been telling rates to go higher since at least last September," said Matthew Graham, chief operating officer of Mortgage News Daily. "Rates keep looking back to see if the writing has changed, and although there have been opportunities for hope (trade wars, stock selling-sprees, spotty data at times), it hasn't. Today is just the latest reiteration of that writing."
The surge in rates could not have come at a worse time for the spring housing market. Buyers are struggling to find affordable homes for sale, as the supply of listings drops to record lows in most major markets. Home prices are now rising at the fastest rate in four years, according to CoreLogic, and show no sign of easing up.
"Homebuyer demand has remained positive and shaken off the higher rate environment so far this year," said Sam Khater, chief economist at Freddie Mac. "However, after years of very low mortgage rates, the symbolic risk of a 5 percent mortgage, on top of higher gas prices, may cause a slowdown in homebuyer demand, particularly in western states and exurbs that are affected more by gas prices than the typical consumer."
Higher mortgage rates often chill prices, as sellers have to adjust to what buyers can afford, but with supply and demand so far out of whack, that is unlikely to happen in the near term. If rates move significantly higher, past 5 percent on the 30-year fixed, prices will have to adjust.
CNBC
