Sample Essay

The article by Associated Press published in the San Francisco Chronicle titled ‘Mortgage Rates Up, Refinancing Activity Slows’ reports on the trend that the rates on the mortgage loans for various periods, especially for 30 year mortgages are increasing significantly leading to a refinancing slowdown. This combined with the increasing demand for housing which is not decreasing is lead to a gap in supply and demand, further driving the rates for the mortgages higher for the consumers.

The article provides that the housing market is gearing its way towards a slow recovery; however the presence of the high interest rates on the mortgages is increasing the costliness of the mortgage products for the customer, therefore making it more expensive for them to acquire mortgages. It has been highlighted in the article that the trends for the rise in the mortgage rates which have hit a 7 month high recently have been caused by the increasing bond yields which are used as an indicator for interest rates in the industry. The recessionary pressures in theUSeconomy have also pressurized the interest rates causing them to significantly increase. The high rates of mortgages come as a threat to the housing and mortgage industry as the industry requires refinancing activity to drive itself, however the increasing rates are simultaneously decreasing the refinancing activity in the mortgage finance industry while the demand for the houses depicted by the consumers is not decreasing.

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