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June 17, 2007

Mortgage rates surging upward

As the subprime collapse and other factors weigh in, mortgages are surging:
The average rate on a 30-year, fixed-rate mortgage rose to 6.74 percent last week, up more than half a percentage point in four weeks, from 6.21 percent, according to mortgage financier Freddie Mac. That would boost the monthly payment on a $400,000 mortgage by $139.

Will they reach an equilibrium soon? How much fallout will this have? The Fed is clear that it won’t cut interest rates anytime soon; could they go up a quarter-point?

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