What Causes Mortgage Rates Going Up?

Several factors can cause mortgage rates to go up.

If you're thinking of buying or selling a home or considering whether to refinance your mortgage, one important factor is the current mortgage rates. Several factors can cause interest rates to rise, which will affect your buying or selling price.

Leading Factor

According to The Truth About Mortgage.com, a primary factor that causes mortgage rates to increase is an increase in the 10-year U.S. Treasury bond yield, as these are often tied to mortgage-backed securities.

Supply and Demand

The concept of supply and demand will also have an impact on mortgage rates. When demand for mortgages is high, sellers can typically command a higher price, which results in higher interest rates.

Considerations

According to LowVARates.com, the overall health and growth of the economy has a direct impact on mortgage rates. If growth is rapid, the Federal Reserve Board may raise the prime lending rate to lessen the impact of inflation. When the prime lending rate rises, mortgage interest rates will also increase.

References

• LowVARates.com: VA Loan Interest Rates
• The Truth About Mortgage.com: How are Mortgage Rates Determined