The average 30-year, fixed-rate mortgage climbed to almost 4 percent from less than 3.5 percent at the end of October.
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Property investors were dealt a steeper rate hike.
The yield on 10-year Treasury notes has increased from 1.87 percent on Election Day to 2.38 percent Wednesday.
If some sort of fiscal stimulus is passed in early 2017, which includes infrastructure spending and tax cuts, it is likely to result in higher real economic growth, but higher growth from expansionary fiscal policy will be at least partially offset by higher interest rates. On Thursday, the Dow Jones industrial average set a record high at 19,083.
"Much like in 2013, we expect housing markets to respond negatively to higher mortgage rates-they will drive down homebuyer affordability, dampen demand and weaken home sales, soften house price growth, and slow the growth in new home construction", he said. Low mortgage rates have helped fuel a rally in home sales.
Ottawa is also trying to crack down on easy lending standards that have been blamed for large increases in home prices in some markets, particularly Vancouver and Toronto. The median price of a previously occupied USA home has increased 6 percent during the past year to $232,200.
But mortgage and savings rates are determined by other factors.
In response, TD increased its own fixed-mortgage rates a week later, but took a more measured approach. That can lead to a short-term spike in sales.
The goal of this post is not to promote ARM loans but to help illustrate that they can be very useful in reducing total interest paid in many situations.
"Certainly there are households on the margin where the difference between 3.5 and 4 percent is the difference between qualifying for a loan and not qualifying for a loan", said Ralph McLaughlin, chief economist at housing data provider Trulia. Although new home sales are increasing, it will not be enough to neutralize declines with existing home sales.
Borrowers' buying investment properties could pay 224 basis points more for the most expensive than the cheapest standard variable loan. "The increase in purchase activity was driven by borrowers seeking larger loans and that drove up the average loan amount on home purchase applications to $310 thousand, the highest in the survey, which dates back to 1990".
The changes follow a move by TD on November 15, in which it raised its special rate offer for a four-year fixed mortgage by five basis points and for a five-year fixed mortgage by 10 basis points.