Hold onto your seats, folks, because mortgage rates are going on a wild ride after the election. Thirty-year fixed rates skyrocketed by nearly a quarter of a percentage point, while 15-year rates and5/1 ARM loans jumped significantly on Thursday,according to a NerdWallet survey of mortgage rates published by national lenders this morning.

If there’s one thing investors hate, it’s uncertainty. And there’s plenty of that goingaroundin the bond markets, because no one is sure what a Donald Trump administration has in store.

On Wednesday, the 10-year Treasury yield closed above 2%, about 25 basis points higher than it was before Tuesday’s election. It’s also the highestyield sinceJanuary, according to Freddie Mac’s weekly survey of mortgage rates, released today.

Mortgage Rates Today,
Thursday,Nov. 10

(Change from 11/9)
30-year fixed: 3.99% APR (+0.20)
15-year fixed: 3.31% APR (+0.14)
5/1 ARM: 3.66% APR (+0.07)

Homebuyers face affordability dilemma

Only time will tell if the surge in mortgage rates will stick. If it does, it could spell trouble for some low- to moderate-income homebuyers who will face a double whammy: costlier mortgages and rising home prices.

The median existing-home price in the September, the most recent month for which complete data are available, was $234,200, according to the National Association of Realtors. That wasup 5.6% from $221,700 in September 2015.

Big rate surges like this one are usually a “knee-jerk reaction” to uncertainty, saysSteven Bogan, regional managing directorwith Glendenning Mortgage Corp. in Toms River, New Jersey.The market had counted ona Hillary Clinton victory based on all the polls and media coverage, and her presidency would’ve been a continuation of current regulations and policies for the bond markets, hesays.

“By Trump winning, all that goes out the window,” Bogan says. “As people are considering potential impacts, things are moving in different directions. A lot of his policies for infrastructure growth and taxes are likely to trigger inflation down the road. That’s why markets are reacting and pricing in higher rates to compensate for future inflation.”

How higher rates will affectconsumers

As with the Brexit vote, in which voters in the United Kingdom opted to leave the European Union, the immediate response in the markets wasswift and severe. Then, as time passed,everyone realized the world wasn’t going to end, Bogan says. So although mortgage rates havejumped this week, they are still fairly low compared withmortgage rates a few years ago.

“My general policy is if your numbers indicate it’s to your advantage to refinance or buy, then you probably should do it,” Bogan says. “Trying to wait out or time the market … sometimes you’ll win, but sometimes you’ll lose.”

For some borrowers, higher rates might make it less advantageous to refinance if they’re on the edge, Bogan says. For example, with a $200,000 loan, a difference of a quarter of a point in the interest rate can increase themonthly payment by $29 — and that adds up over the life of the loan, hesays.

Perhaps the biggest impact of rising rates is on homebuyers already in the midst of the loan application process. If you’ve locked in your rate and are trying to get your documentation in, you’re in a time crunch to close your loan before the rate lock expires.

If it does expire, the rise in rates might beenough to move you from qualifying to not qualifying. That would put your entire loan in a pickle if you’re trying to scrape up money to pay lock-extension fees or a biggerdown payment to keep your monthly payments affordable, Bogan says.

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Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offeredby a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providingthe most accurate view of the costsa borrower might pay.

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Deborah Kearnsis a staff writer at NerdWallet, a personal finance website. Email: Twitter: @debbie_kearns.

The article Mortgage Rates Today, Thursday, Nov. 10: Mortgage Rates Soar After Trump Win originally appeared on NerdWallet.

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