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There was a good article over in the Christian Science Monitor that outlines some of the reasons mortgage rates have been rising in recent weeks and why that trend might very well continue. Here are some excerpts:

Surging interest rates are making it harder for Americans to get mortgage deals, and set the stage for taxpayers to pay higher fees on a soaring federal debt.

What’s happening is a full-fledged bear market in Treasury bonds, as investors become more optimistic about the economy. They’re buying more stocks and less government debt, a trend that pushes up government borrowing rates.

The interest rate on a 10-year Treasury note has gone from 2.93 percent in April to 3.68 percent Monday. That’s an extraordinary surge in just a few weeks.

Mortgage rates, which are often tied directly to the direction of US Treasury bonds, are also heading upward, at a time when many households would like to refinance their loans to save money.

“I would suspect that the move up in bond yields will continue into next year,” says Michael Cosgrove, a Dallas economist who publishes the EconoClast, a market newsletter. “In particular, the home mortgage market is the one that will be impacted.”

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