Mortgage rates are now sitting solidly at the highest level in two years and could move even higher in the coming weeks.
Granted, January is not exactly the hottest season for the housing market — homes don't top the holiday gift list — but in February, all eyes move to the all-important spring season.
Even before a Fed move, the average rate on the popular 30-year fixed mortgage shot up from record lows immediately after the presidential election, as investors piled into the stock market and sold out of the bond market [mortgage rates loosely follow the yield of the U.S. 10-year Treasury].
They then continued to move slowly higher, with the resulting move going from about 3.5 percent to now 4.25 percent. The last time rates moved by that much, in June 2013, home sales suffered and house price gains dropped by half.
This time around, however, there is great debate over whether rising rates really matter to housing. After all, increasing rates are indicative of a stronger economy, and a stronger economy favors housing.