Mortgage interest rates spike

Mortgage interest rates spike »Play Video
TRI-CITIES, Wash. - Mortgage rates are on the rise, the highest jump in two years. Shooting up half a point in just a week.

The increase comes at a time when the economy seems to be turning around.

For David Broussard, it's all about making ends meet. He's semi-retired and plans to stay in his home in Richland. He hoping to make every dollar stretch.

He said,"Well I don't want to see them going up again until I can get mine refinanced, so let's keep it at a lower rate."

Unfortunately for home owners like David, that ship may have sailed. Fixed rates for a 30 year loan are on the rise, up around half a point in one week, hovering at about 4.5 percent.

Local experts say we may not have hit the peak.

Wayne Langford, president of The Tri-Cities Association on Realtors said, "Six months ago, the Mortgage Bankers Association had predicted rates to be four point four by the end of the year. Well, they've already reached that this soon so they could go higher, we don't know."

This is the highest one-week jump for interest rates since the late 80's. Rates for 15-year loans are no different. Those rates spiked as well, up to 3.5 points in just a week. They affected by the financial market and bond sales.

For David, being on a fixed income, means tracking every penny.
Knowing that he'd have less to count if rates continue to go up is unsettling.

He said, "It's like sitting at the gambling table without having control over the dice."

On the flip side, buying a house now may be your only chance to lock in a decent rate. If the economy continues to stabilize rates could jump even more.

The number of home sales in the Tri-Cities are up ten percent from this time last year. Construction on new homes doesn't seem to be slowing down.

Langford said, "We're still at historic lows for interest rates, even your grandparents didn't get rates this low."

It's a mixed bag depending on how you look at it.

Agents say the average homeowner will see an increase of about $50 to $100 in their interest payments per month.