U.S. Mortgage Rates

This is becoming a big issue. The 30 year mortgage rates have hit the year high. Like the other big issues that the market is ignoring, the market is continues to ignore this one. For all the efforts of the Fed and the U.S. government to keep mortgage rates low, this is a complete slap in the face.

I tend to think this is all more tied to the inflation trade and what is forcing oil and other commodities higher. I still think it is premature and the rates and the commodities will head lower before really taking off sometime in the next 1 to 3 years. Could be wrong but in the short term, the more the mortgage rates stick north of five percent and the more commodities climb, the more pain the consumer will feel.

From Bloomberg

Fixed U.S. mortgage rates jumped to the highest level this year, signaling the Federal Reserve’s plan to lower borrowing costs has stalled.

The average 30-year rate rose to 5.29 from 4.91 percent a week earlier, Freddie Mac, the McLean, Virginia-based mortgage buyer, said today in a statement. The last time the rate was higher was Dec. 11, when it was 5.47 percent.

and

Yields on the benchmark 10-year Treasury note and Fannie Mae mortgage bonds are higher than they were before the Federal Reserve said March 18 that it would buy as much as $1.25 trillion in mortgage-backed securities to help drive down borrowing costs.