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The stock market is helping to push mortgage rates higher


The average rate for a fixed thirty year mortgage is now well above six percent, here are the major reasons why.

The stock market rally in April has been a major factor in helping to move long term fixed rate mortgages up. The ten year bond has gained almost twenty basis points for the month. Investors are feeling more confident about the future growth potential in the stock market and are putting more capital in equity positions. The rapid rise of oil has many economist fearing that inflation will also be a major item to watch as we head into the second quarter and balance of the year. Transportation costs are increasing and this will carry over to food prices, traveling and consumer spending. The forces that are moving the market are all pressuring investors to want higher yields for bonds. The stock market has enjoyed it's first positive month of the year and large investment firms are now indicating to most investors that their are bargain prices on a number of industries. The net effect is fixed mortgage rates are unlikely to drop below six percent anytime soon and this is likely to put more pressure on a bruised real estate market.

4-28-2008 ? LoanNetwork.com





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