What goes up, must come down?

Overall, Atlanta mortgage rates have seen a half per cent rise in the last month alone.  Four weeks ago we were talking about 15-year fixed rate mortgage rates in the six per cent zone.  Today this rate is 6.57 per cent.  Some may be wondering what is the root cause behind what is nothing less than a ride on the interest rate skyrocket.  However, American homeowners should keep in mind that rises of this nature, while not overly common, are not unprecedented.  Indeed, they’re not even unprecedented within this century.  Only as recently as August 2003 the 30-year fixed rate mortgage rate went through a period of four weeks when it rose an amazing eighty two basis points.  However, if you’re looking for that magic silver lining, it’s also worth noting that in nearly all cases where there has been some form of dramatic rise in Atlanta mortgage rates, there has been an equal period when the pendulum of Atlanta mortgage rates has swung the other way, with a rapid reduction in Atlanta mortgage rates as they re-align themselves.  One is ever hopeful that this is exactly what will happen in the coming few days and weeks. 

The more important question, however, is what effect is this having on home mortgage applications?  Surely a rapid increase in Atlanta mortgage rates would effect a reduction in home mortgage applications.  Or so you would think.  However, according to figures of the Mortgage Broker’s Association, home mortgage applications actually rose six per cent in the last week – and that’s despite the double-digit basis point rises in Atlanta mortgage rates.  Without doubt some of these will be homeowners with 5-year adjustable rate mortgage rates, looking to fix their Atlanta mortgage rates before the bloodbath gets any worse, but there will also be a certain percentage of new homeowner mortgage applications in there, which goes to show that while interest rates may be rising, the fundamentals of the housing market are still sound.  All we have to wait for now it that much anticipate re-alignment of Atlanta home mortgage rates.