Inflation worries, lead by reports of a jump in consumer spending November along with a rise in inflation during the same period, have caused major lending institutions to raise their 30-Year mortgage rates to above 6 percent. The average rate rose to 6.17 percent in some markets, compared with less than 5.96 percent just three weeks ago.
Analysts points to the worry about inflation being a major factor in the rise of long-term bond yields over the past week, which has a direct effect on mortgage rates. Many of the same analysts are also predicting a major slowdown in consumer spending in the months to come as the worry over the housing market and credit markets persist.
Much of the reason that the housing market is in such a slump is due to the fact that sub-prime credit is becoming harder to obtain in many markets. This has led to a glut of housing on the market and is expected to worsen as the credit market continues to further pull back on the reigns of lending to at-risk individuals. Many credit analysts predict that further concerns over inflation and consumer debt will lead to even tighter credit standards being adopted by many of the major...
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