Here are a couple of charts courtesy of Bankrate. The annotations are mine.
15-Year Fixed Rate Mortgages
30-Year Fixed Rate Mortgages
Explaining the Rebound in Housing
If you are looking for what fueled the rebound in home sales and the increase in home prices, look no further than the above chart.
In the two-year period from December 2010 until December 2012, the rate on popular 30-year mortgages fell from 4.97% to 3.42%, a decline of 155 basis points (1.55 percentage points). In April, rates were still near record lows at 3.56%.
Are Mortgage Rates Cheap?
From the record low in December 2012, 30-year fixed rate mortgages have risen 97 basis points to 4.39%.
While still low historically, it's the direction of the trend that is important, not the absolute number. A one percentage point increase in rates decreases housing affordability by 10-11%.
US Treasury Rates
Mortgage rates are generally tied to rates on 10-Year US treasuries. Here is a chart that explains the rise in mortgage rates.
click on chart for sharper image
Anyone who stretched to buy is no longer qualified unless they locked some time ago.Mortgage Applications Decline 13th Time in 15 Weeks
Refinancing will soon be dead in the water (anyone who has not already locked no longer has any incentive) and new home affordability has taken a big hit.
Mainstream media talking heads say this will not affect the housing recovery. Assuming this trend sticks (even if rates simply level off now), how can this bond revolt not affect housing?
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