Mortgage rates move up as stock market rallies

The stock market had a solid week of gains for the first time in the past sixty days. The market breathed a bit easier after solid earnings from key financial companies such as JP Morgan Chase and Wells Fargo helped to reassure the financials that the banking industry was still capable of being profitable. The yield on the ten year bond jumped almost thirty basis points for the week as the ten year adjusted from 3.8 up to near 4.1% on Friday. The net effect is that fixed mortgage rates moved up approximately 3/8 of a percent with most mortgage lenders.

This year has been a roller coaster ride for both the stock market and mortgage rates. The rapid decline in oil prices this week could help to bring mortgage rates lower in the near future if the trend continues as this will help to ease up some of the inflationary pressures in the market.  Corporate earnings have already been damaged by high energy prices, but certain industries are likely to continue to see some improvements, such as banking, which has build in a good portion of their losses from the mortgage credit crunch to date.