Rise in mortgage rates effectively raises prices.

Home-mortgage rates have surged to their highest level in more than three months, with the average for 30-year fixed-rate loans jumping to 5.44% last week.  That was the highest level since early February, according to a survey by HSH Associates, a financial publisher cited by the Wall Street Journal.

Last Thursday’s 5.44% rate, while low by historic standards (but not in recent months), represented a jump from 5.29% Wednesday and 5.03% Tuesday.

When rates rise 0.1%, the increase is like a 1.0% rise in price.

When mortgage rates rise 0.1%, the increase translates into a 1.0% rise in the price of a property.

Mortgage rates are being pushed up in part by a steep increase in yields on long-term Treasury bonds.

“The spike in rates has the potential Continue reading