BUBBLE, BUBBLE…Interest rates are going up:
When potential home buyers call for mortgage rate quotes these days, “they’re shocked; they almost don’t believe you,” said Jim Foley, senior vice president of George Mason Mortgage. “They’re quick to get off the phone to make more calls.”
The average rate on a 30-year, fixed-rate mortgage rose to 6.74 percent last week, up more than half a percentage point in four weeks, from 6.21 percent, according to mortgage financier Freddie Mac.
This really demonstrates what a bubble we’ve been living in. My first thought when I see a 30-year fixed rate of 6.74% is that it’s an incredible bargain. Until about 2002, I hadn’t seen a rate that low in my entire adult life.
But of course, compared to the past four or five years, it’s pretty high. So high, in fact, that today’s home buyers recoil in shock. What the bubble giveth, the bubble taketh away.