Mortgage rates soared again Monday, tacking on a half-percent in a day for the second time in under a week.
Each half-percent adds $62 to a $200,000 home loan’s monthly payment, or $744 per year.
For home buyers recently under contract, it’s a gut-wrenching time to be shopping for a home loan. Morning mortgage rates have been typically gone by early-afternoon and — in some cases — lenders have changed rates five times in one-day span.
The reasons for surge in rates are varied, but each is related to the idea that the economic recession may be nearing its end.
Each of these points bodes well for the economy and pushes Wall Street investors towards more risky investments. As a result, “safe” investments get sold — including mortgage-backed bonds, the basis for conforming mortgage rates.
For as long as the future of the economy remains in question, expect mortgage rates to remain volatile. We won’t get half-point rate swings or five pricings in a day every day, but both are becoming more common.
Be careful when shopping for a mortgage — the rate you’re quoted may not last long.