Mortgage Rates Continue September Surge, Approach Five-Year High

A relatively quiet end to August has given way to a September in which rates have flown out of the gate — a surge that many analysts view as past due. Mortgage rates shot upward this week, rocketing to their highest levels since May and quickly approaching a five-year high.

A recent steady stream of strong economic data has reaffirmed the strength of the U.S. economy, giving the Fed little reason to alter its scheduled rate increases in the immediate term. Furthermore, despite uncertainty surrounding global trade, consumer confidence in the American economy is remarkably high – its highest level in nearly two decades. All told, it seems unlikely rates will deviate from these levels anytime soon.

A relatively light week of economic releases should not move rates much, although markets are likely to pay particular attention to Thursday’s existing home sales data. Recent housing market indicators have been weaker than anticipated, and another round of soft housing data could signal a broader slowing in that critical sector of the economy.