U.S. in 'new financial territory' as mortgage rate surges — Larry Summers
The US 10 year rate just crossed above 4 percent. Mortgage rates comfortably exceed 7 percent. We are now in new financial territory.On Wednesday, the yield on 10-year U.S. government bonds reached 4.017 percent, according to Tradeweb, only to shortly after fall to 3.963 percent following the Bank of England's announcement that it will buy longer-term U.K. government debt.
Mortgage rates have surged in the last few days. On Wednesday, data from the Mortgage Bankers Association showed they had jumped to 6.52 percent, the highest they have been since August 2008, while asaid they had crossed 7 per cent on the 30-year fixed to 7.08 percent, the highest rate in just under 20 years.
The increase will mean that many potential home buyers might lose their mortgage eligibility while some will be priced out of the market altogether.
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