Mortgage Rates at a Seven-Month High

It looks like wheedling in new buyers with low rates like bribing children with candy simply isn’t working for mortgage providers. In fact, they seem to have given up on the strategy completely, as evidenced by yet another hike in mortgage rates this week.

Rates are now the highest they have been seven months, with the average 30-year fixed-rate mortgage at 5.59% and 15-year fixed-rate mortgages at 5.06%. Both of these numbers are still lower than last year’s rates at the same time.

That said, with the economy still in turmoil and the unemployment rate near a whopping 10%, these rates aren’t much of an incentive for today’s buyer.

Freddie Mac vice president and chief economist Frank Nothaft said that the increase was attributed to seemingly good news. “Mortgage rates followed the increase in bond yields this week as the May employment report showed that the economy lost fewer jobs than the market consensus had expected,” he said.

So even though almost 1 in 10 workers is jobless at the moment, rates are still going up simply because it could have been worse but wasn’t? What’s next, putting off H1N1 vaccine development until a number of people are infected–or die–that’s worse “than the market consensus had expected”? If we ran the nation like the housing market, pure chaos would surely ensue.

Without these lower rates, there isn’t much left to make people eager to go a-home-buying–especially if they know that their jobs are, or could be, in jeopardy. The big question is–aside from just how high rates will continue to rise–how are providers planning on enticing new buyers now?