Mortgage rates were on the rise last week. Not only did the average rate move above the highest seen in 2013, but rates haven't been this high since May 22nd of 2012!
Of course, there is the "everything is relative" perspective, whereby we can attempt to appreciate the fact that best-execution is still around 3.75 - 3.875%; the fact remains that the day to day movement was devastatingly swift, and on the most aggressively negative end of the spectrum of possibilities heading into the day.
Despite the recent jumps and fluctuations in mortgage rates, the Fed's $85 billion monthly stimulus program has kept rates low. But this bond-buying quantitative easing program, known as QE3, will have to end at some point.
The Feds will continue the stimulus "until the outlook for the labor market (has) improved substantially," said Federal Reserve Chairman Ben Bernanke in testimony to Congress Wednesday.
"A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further," he says.
But the Feds may adjust the size and pace of the stimulus, Bernanke told Congress. When pressed for more specifics during the hearing, he didn't rule out the possibility of tapering QE3 by Labor Day, adding that if the employment market improves, the Feds could prepare to "take a step down" in the next few meetings.
The markets immediately reacted to Bernanke's comments, putting upward pressure on rates.
Rates had just started adjusting back down after the recent spikes, but now it may take longer for rates to drop back to the lows, if at all.
In this time of investment uncertainty in home mortgage interest rates, one thing is certain; they will rise. Take advantage of low interest rates and excellent home prices. This combination makes "now the time to buy".