The steady rise in interest rates over recent weeks is threatening to trample the green shoots of recovery in the housing market, the Wall Street Journal reports. Rates on 30-year mortgages hit 5.79% yesterday, more than a point above the 4.75% "trigger" level analysts say spurred the wave of refinancing central to the White House's stimulus plans.
The Fed's efforts to curb the rise have had little effect. Experts believe the higher rates will halve the number of people looking to refinance, although lenders say the take-up rate on a government program to help lenders refinance was disappointing even when rates were at their lowest. "I think the intentions of the government were really good," the chief of one mortgage company said. "But it just hasn't worked that well."