Mortgage Rates End Week at Highest Levels

Mortgage rates rose fairly quickly on Friday, depending on the lender and the scenario.  Bonds (which dictate mortgage rates and interest rates in general) weakened overnight on a variety of foreign and domestic data.  While we can't necessarily be sure that one particular development was more responsible for the move than another, we can observe that most of the damage followed news of surprisingly strong credit growth in China.  This could stand to reason given that China and Europe are central to the cautionary economic stance taken by the likes of the Fed.

In general, uncertainty about the global economy would be associated with lower interest rates.  Actually a downbeat economy is even better than an uncertain one!  With Chinese GDP and several European metrics hitting long term lows in the past few months, recently low interest rates made good enough sense.  But if Chinese loan growth is exploding, it's akin to someone saying "not so fast" to the downbeat outlook and low rate environment.  That said, this is just one piece of data and it would require actual economic output to confirm the fears expressed by today's rate spike.

This Daily Mortgage Rate Update is provided in partnership with Mortgage News Daily.