In October, the rate for a 30-year fixed-rate mortgage crossed the five percent threshold, boosted by the strength of the overall economy, and positive payroll and employment data.
Rates have seen sustained growth since the start of September, and recent comments from Federal Reserve officials suggest that rates could continue to increase as the year winds down. Zillow senior economist Aaron Terrazas says that if prices increase faster than anticipated, rates would be encouraged to rise again, dampening sales, while softer home price growth data could mean rate relief for borrowers.
Markets tend respond to economic releases in fits and spurts, with sharp movements often followed by brief retreats. However, there is no doubt that the trend is decisively higher — indeed, rates did recede slightly over the last couple days, but are still up substantially from a week prior. Following a mundane end to August, rates have risen consistently to begin the fall, and comments from several Fed officials this week bolstered the notion that the American economy can withstand even higher rates.
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