Mortgage Rates are Rising - This Chart Says They Will Move Higher Still


(This is an excerpt from Thursday's (10/14) DecisionPoint Alert)

We want to watch the 30-Year Fixed Mortgage Interest Rate, because, for the most part, people buy homes based upon the maximum monthly payment they can afford. As rates rise, a fixed monthly payment will carry a smaller mortgage amount. (See table.) As mortgages are forced to shrink, real estate prices will have to fall, and many sellers will increasingly find that they are upside down with their mortgage. That, or we will now see inflated real estate prices begin to normalize.

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Right now, rates are rising quickly. Looking at the chart, we see a double-bottom forming. This tells us that rates could continue rising. If it moves above the confirmation line of the double-bottom (that confirms the pattern), the minimum upside target would take rates all the way to 3.75%. Add this to inflation, rising energy costs and other data points and life is about to get harder for home buyers and renters alike.

Technical Analysis is a windsock, not a crystal ball.

--Carl & Erin Swenlin

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Carl Swenlin
About the author: is a veteran technical analyst who has been actively engaged in market analysis since 1981. A pioneer in the creation of online technical resources, he was president and founder of, one of the premier market timing and technical analysis websites on the web. DecisionPoint specializes in stock market indicators and charting. Since DecisionPoint merged with in 2013, Carl has served a consulting technical analyst and blog contributor. Learn More
Erin Swenlin
About the author: is a co-founder of the website along with her father, Carl Swenlin. She launched the DecisionPoint daily blog in 2009 alongside Carl and now serves as a consulting technical analyst and blog contributor at Erin is an active Member of the CMT Association. She holds a Master's degree in Information Resource Management from the Air Force Institute of Technology as well as a Bachelor's degree in Mathematics from the University of Southern California. Learn More
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