Why Did the Debt Crisis Affect Mortgage Rates If It Didn’t Actually Happen?

Why Did the Debt Crisis Affect Mortgage Rates If It Didn’t Actually Happen?

Economists predicted that a government default would cause interest rates to rise because it would hurt the creditworthiness of the United States and increase the treasury’s cost of borrowing money. Since the interest rates on consumer loans are tied to the treasury rate, a default would cause all interest rates to rise, including mortgages.

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Mortgage Rates Move Upward

Mortgage Rates Move Upward

Rates have risen across the board, with the 30- and 15-year fixed rates roughly where they were two weeks ago. This is unfortunate for first time home buyers or those looking to refinance, but a good indicator for the U.S. economy and the fortune-telling future of line graphs. But because rates have risen, mortgage rate wolf has disappeared. Will he return? No one knows, but we’ll discuss the raw numbers from Freddie Mac anyways.

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