Mortgage rates have started to increase this week. The 30-year fixed and the 15-year fixed rates increased by 0.02%, making them 4.14% and 3.36% respectively. The 5-year adjustable rate has increased by 0.03% making it 3.05% this week. These increases could be caused by the positive economy and employment market reports released last week. However, the EU debt situation in Greece and how debt negotiations pan out will prove pivotal to interest rates. The European Debt Crisis is weighing on the minds of the institutional investment community, and have not bought into the idea of moving substantial sums of investors’ money from treasuries into equities. The improvements in the unemployment have caused some to dabble a bit in equities, but tepidly, leading to this weeks slight rise in mortgage interest rates.
 
Mortgage applications also surged last week, up 7.5%. About 80% of these applications were for refinances.  Since the rates last week hit record lows, it explains why there was an increase in mortgage applications. Everyone is trying to get the lowest rates possible at this point and now is a good time.

To sum it up; with the release of the employment report for January, many thought that the mortgage rates were going to increase substantially. The report showed a gain in jobs and was better than economists expected it to be. However, the rates didn’t increase as expected, mainly because investors are still skeptical for now. 
With the Fed trying to keep mortgage rates low until late 2014 and the positive economy reports, rates may start to rise. If they do, it will most likely be over a long period of time, and it will happen little by little each week.