This comes despite the fact that there are many analysts expecting the ongoing war to have a negative impact on the economy.
The recent increase in mortgage rates has been attributed to the rise of the 10-year treasury yield, which is a key indicator of economic health. It was noted that the yield rose above 1.75%, the highest level since March 2020. As this yield increases, it has led to an increase in the 30-year fixed mortgage rate to 3.28%. This marks an increase of three basis points, and is indicative of a growing sentiment of optimism about the economy in the near future.
The Federal Reserve has also decided to keep its current policy of low-interest rates, which has had a positive impact on mortgage rates as well. In addition, some experts believe that the overall improvement of the economic situation will further drive up mortgage rates in the coming months.
Even though there are positives in the form of increased mortgage rates, many are still concerned about the ongoing war. There are worries that the conflict could further destabilize the economy, leading to a decrease in consumer spending and investment. Additionally, the rising oil prices due to the conflict could lead to more inflationary pressure, which would further dampen economic activity.
Despite the concerns, the mortgage rates have continued to climb, indicating that the market is still optimistic about the economy. However, it remains to be seen how much more of an impact the war will have, if any, and whether the current trend of increasing rates will continue.
In summary, mortgage rates in the U.S. have begun to climb recently, despite the ongoing war in the Middle East. This rise in rates has been attributed to various factors, such as the rise of the 10-year treasury yield and the Federal Reserve’s decision to keep its interest rates low. Moreover, many analysts believe that the overall improvement of the economy will further drive up mortgage rates in the coming months. However, there are still some concerns about the war's impact on the economy, with worries that it could further destabilize it and lead to more inflationary pressure. Nevertheless, it seems that mortgage rates have so far remained unaffected and it remains to be seen whether this trend will continue in the future.
This article was contributed on Nov 30, 2023
