Investors Expect Economic Upswing, Ditch Treasury Bonds: Mortgage Rates Likely to Increase

By Kyle Chezum Updated on 12/10/2010

12/10/2010

Mortgage rates hit historical lows this year as recently as October, but as investors dump Treasury bonds in anticipation of economic rejuvenation during the coming years, mortgage rates have begun to climb rapidly upward.  Rates have increased more than 0.1% to 0.2% each week for the past four consecutive weeks.

Mortgage rates typically track Treasury bond yields, which have been increasing as more and more investors sell them off.  If this trend continues, it’s likely that rates will continue to climb upward through the beginning of the new year.

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