AP
30-year mortgage rates rise sharply
Thursday October 30, 12:30 pm ET

Rates on 30-year mortgages rise to 6.46 percent, highest in three weeks

WASHINGTON (AP) -- Rates on 30-year mortgages spiked this week as the tumult in financial markets continued to be felt in housing finance.

Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.46 percent this week, up from 6.04 percent last week.

Rates on 30-year mortgages hit a high for the year of 6.63 percent in late July and then dropped to a seven-month low of 5.78 percent the week of Sept. 18.

Rationale: Analysts attributed the increase to the impact the financial crisis is having on bond markets. The upheavals on Wall Street last month drove investors to the safety of Treasury securities. Now that the panic is easing a bit, investors are moving out of Treasury bonds into other investments. That movement means less demand for Treasury securities, pushing their yields higher. That increase drives up rates for mortgages linked to those investments.

Andrew's Comment: We should see more upheaval in the stock markets over the next year, due to the recession that we're not in, driving investors to the safety of fixed investments at times, driving rates lower during those fearful rallies.  Watching the market and waiting for a good time to lock is key to the rate lock success game.

Andrew Schmidt- Nations Home Funding- BK0905991