Mortgage rates took their biggest leap in two months on Friday, thanks to a sell-off in the U.S. bond market. Mortgage rates loosely follow the yield on the 10-year Treasury. It was only an eighth of a percentage point move, but enough to send stocks of the nation's homebuilders, as well as anything else that touches housing, tumbling.
The numbers on the tickers are dramatic, but the impact of higher mortgage rates on the nation's neighborhoods will take different forms.
First and foremost, rising rates scare a whole host of housing players: buyers, sellers, builders and homeowners. The average contract interest rate on the popular 30-year fixed mortgage is still historically very low, around 3.5 percent. The historical average for that rate is just more than 8 percent, and it has been as high as 18 percent. Still, a move higher is scary.