Market Insight
Mortgage Rates Rose By More Than 1/2 Percent Wednesday
May 28, 2009 by James K Barath, CMPS · 1 Comment
_1243493523.jpg)
Conforming mortgage rates rose by 0.625 percent Wednesday. Yes, you read it right. Zero-point-six-two-five percent.
The surprise surge in pricing started shortly after 1:00 P.M. ET, then continued all the way until the market’s closing. It was the sharpest one-day surge in mortgage rates in recent history.
Perhaps ever.
For mortgage rate shoppers swept up in the surge, monthly payments are now higher by $29 per $100,000 borrowed.
That’s a significant shift.
For as rare as Wednesday’s events were, though, middle-of-the-day, 0.625 percent rate changes don’t just happen. Yesterday, the action was the result of a confluence of factors, including:
- Rising oil prices and gas prices
- Optimistic predictions about the end of the recession
- Concerns over the U.S. total debt load
- Fears of inflation
In addition, momentum trading played a role.
As markets worsened, selling begat more selling, amplifying Wall Street’s total losses. As mortgage bond prices fell, mortgage rates went up. By a lot.
Mortgage markets are notoriously fickle and yesterday’s events proved it. Days like Wednesday are precisely why insiders recommend shopping for mortgage rates in a compressed timeframe. The faster you finish, the lower the risk of losing low interest rates to new market conditions.
About the Author: James K Barath is a Certified Mortgage Planning Specialist, qualified liability advisor and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James Barath today for your Borrow Smart Analysis - the CALM Approach to Borrowing ! His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy! 
Awesome article! I have gradually become fan of your article and would like to suggest putting some new updates to make it more effective.