Mortgage rates took a sudden jump last week, going from 3.93% to 4.46%. This is the largest weekly hike mortgage rates have seen in 26 years and have reached the highest level since July of 2011 according to Freddie Mac’s weekly survey. Although the interest rates are on the rise, they are not expected to greatly impact the housing market. The effect of the .53% increase should be smoothed out by the still high level of home affordability. This new increase in rates will cost about $56 more for every $100,000 borrowed on a 30 year fixed rate mortgage.
The uncertainty behind the Federal Reserve’s June 19th statement to slow its bond purchases later this year and coming to a complete halt by the middle of next year, is the reason behind this sudden increase in fixed mortgage rates. With the Federal Reserve ceasing the purchase of bonds, it is very likely we have seen the last of super low rates.