Interest Rates Jump Nationwide

As was written on CNN, USA Today, and countless other publications.  The average 30 year fixed interest rate mortgage jumped to 6.74%.  This was over a .50% jump in the rate from the Wednesday prior.  This was the largest single week rise since April of 1987.  This could become a cause for alarm, for the US real estate market.  The higher the cost to borrow money the more expensive a house becomes.  A .50% increase on a $200,000 mortgage is about $70.  This is not a huge increase in a monthly payment but definitely something that could gradually add up.

Many experts attribute the rise in interest rates to the Fed's bailout.  In order to raise money the Fed has been forced to raise the interest rates on Treasury bills.  It is normally found the mortgage rate mirrors the 10 year Treasury bill.  In the last week the 10 year Treasury bill increased a half percent or about the same as the 30 year fixed mortgage rate. 

With home prices falling, we have to hope the 30 year fixed rate mortgage remains under 7%.  This would continue to make many properties, especially in the Outer Banks, worthwhile investments.

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