St Casimirs Mortgage Minute

Bankers Welcome Rise in Mortgage Rates, If It's Slow and Steady


Mortgage interest backpedaled this week from a 14-month high of 3.98 percent last week, as the average rate on 30-year fixed loans dipped back down to 3.93 percent. The direction is expected to reverse again next week, however, based on the strong likelihood that the Federal Reserve will scale down its bond purchases later in the year. The shift could mean some pain for borrowers and for banks that have been raking in fee income from refinancing loans and selling them on the secondary market. But bankers in general -- and community bankers, in particular -- concur that a slow, steady rise in long-term rates would help normalize conditions. However, "if the 30-year [rate] really spikes a lot, that will have an effect on the real estate market, and it's a fragile market," warns Alex Grinewicz of Columbia Bank in Fair Lawn, N.J.

From "Bankers Welcome Rise in Mortgage Rates, If It's Slow and Steady"
Colorado Springs Gazette (06/20/13)