Wednesday, December 30, 2009

Treasury market's slump could fuel mortgage rates

A lack of interest by investors in U.S. government debt could drive up interest rates on home mortgages and stop the housing market's shaky recovery, experts said. The interest rate on the benchmark for home mortgages, the 10-year Treasury, climbed from 3.2% in November to 3.83% on Monday. Freddie Mac said the average rate for 30-year mortgages had risen to 5.05% last week from 4.81% two weeks earlier. Increasing mortgage rates could force home prices down, cut demand on the part of buyers or both. The Miami Herald/Los Angeles Times Service

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