By Kenneth R. Gosselin
Second, an improving economy is pushing mortgage rates higher. Home loan rates move in lock step with the yield on 10-year U.S. treasuries. Last Friday, the yield rose nearly a quarter of a percentage point, to 2.74 percent. That was the biggest jump since August 2011.
The yield, or investment return, rises in a strengthening economy because the government must offer a higher return to attract investors who might want to move money to something potentially more profitable, such as the stock market.
Friday’s uptick in the yield came after the federal government reported that the nation’s employers added 195,000 jobs, well above the 165,000 expected by analysts. The nation’s jobless rate remained at 7.6 percent as more jobless workers entered the labor force and offset the increase in employment. That might be a sign that more people are optimistic about getting a job.
There is one upside to rising rates: Dismally low rates on savings accounts and certificates of deposit also could rise.
“If this is going to stick, we should see other rates go up as well,” Neilson said.
©2013 The Hartford Courant (Hartford, Conn.)
Distributed by MCT Information Services
Copyright© 2014 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.
Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com