The average rate on the 30-year fixed mortgage fell to 4.21 percent in early October, according to the Mortgage Bankers Association. Last week it was up to 4.56 percent, and with the yield on the 10-year Treasury up over 3 percent (which mortgage rates track), the expectation is rates will go even higher.
"Based on the average spread this year, the average 30-year mortgage rate is likely headed to 4.75 percent over the next week," notes Peter Boockvar over at Miller Tabak. It was 4.66 percent last night, according to Bankrate.com
While some home buyers lock in a mortgage rate before signing a contract, many go mortgage shopping after they sign the deal. Buyers who thought they were getting around 4.25 percent in October may be hit with sticker shock when they realize what they can actually get. We've seen applications to refi plummet over that past two weeks, down 22 percent just last week, as rates rise. Purchase applications are still in the positive, but just barely, and you would think they would have shot up recently, given the jump in signed contracts.