Rising Bond Yields' 'Ripple Effect' on Housing

Bond yields have soared in the past few weeks, prompting banks and lenders to charge consumers more on mortgages and other loans tied to bond yields.

Interest rates on fixed-rate 30-year mortgage loans increased to 4.40 percent, per Freddie Mac, the highest since April 2014. Greg McBride, chief financial analyst at Bankrate.com in Palm Beach Garden, Florida says that rising home prices are also hampering homebuying, "It does dent their affordability. It will rob the housing market of some momentum, but it won't derail it because we still have a strong economic backdrop." CNBC reports that housing activity is stable overall, despite rising costs. In January, home construction hit a one-year peak.

Investors await Fed Chairman Jerome Powell's remarks before Congress next week. They are keen to see if Powell will offer clues that he will stick with a gradual approach in raising interest rates, as did his predecessors Janet Yellen and Ben Bernanke, with the economy at or near full employment and with inflation seeming to be heating up ... The Treasury Department sold $258 billion in debt this week, the second biggest ever weekly issuance, in its effort to raise more cash to fill a widening budget gap.

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