Higher mortgage rates to push buyers away from market

Higher mortgage rates to push buyers away from marketExperts have said that the higher mortgage rates in the US are pushing buyers away from the market in the short term bowers will be required to pay higher interest rates.

The Mortgage Bankers Association said that the mortgage rates measures by it rose significantly and this would affect refinance activity. It noted that the number of refinance applications fell to its lowest level in two years. The latest data showed that the mortgage rates in the US rose to its highest level in a period of three decades on concerns that the Federal Reserve will soon begin rolling back to stimulus package for the US economy.

The mortgage rates have been rising since May and have now touched to 4.46 per cent this week, rising above the 4 per cent mark for the first time since March 2012. The average of a 30-year fixed home loan rose form 3.93 per cent to 4.46 per cent, recording its biggest increase in the Freddie Mac survey since 1987 due to concerns that the US Federal Reserve is set to roll back its stimulus package.

The Federal Reserve officials are trying to calm the situation by convincing investors that the Federal Reserve will not suddenly withdraw stimulus package that has helped the US economy survive the financial crisis by keeping the borrowing costs low. The reserve will continue to provide stimulus to support the recovery of the economy but has indicated that it will begin a gradual roll back.