Economic Growth Causes Short-Lived Spike in Mortgage Rates

The 30-year fixed mortgage rate on Zillow (NASDAQ: Z) jumped last week to the highest level in more than a month following reports of economic growth, but rates are still largely remaining resistant to any substantial uptick, according to a recent Zillow report.

The mortgage rate is currently 4.03%, down one basis point from this time last week when it spiked, peaking at 4.23% on Thursday before easing back down to the current rate on Friday.

“Last week, mortgage rates temporarily jumped to the highest level in more than a month on the back of strong GDP growth figures, before cooling after weaker-than-expected jobs news,” said Erin Lantz, vice president of mortgages at Zillow. “This week we expect rates to remain steady, with limited influential domestic data slated for release.”

But rising mortgage rates, which impact mobility and home affordability, continue to impact home sale volume, and some expect rates on a 30-year fixed-rate mortgage to reach 5.28% by July 2016.

The Federal Reserve has been tapering its bond purchase program, which many anticipate will put upward pressure on interest rates by 2015. In its most recent statement, the Federal Open Market Committee said that due to underlying economic improvement metrics, it will further taper its bond buying activities starting this month.

Written by Emily Study

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