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It begins. After months of low mortgage rates, it looks like the party is over.

Americans woke up this morning to the largest upward spike in 30-year fixed-rate mortgages since back in 2008. According to BankingMyWay, the 30-year rate rose roughly 140 basis points last week, from 5.143% to 5.28%.

Here is the whole enchilada, as measured by the BankingMyWay Weekly Mortgage Rate Tracker:

Description          This Week     Last Week

One-Year ARM          3.814%        4.74%

Three-Year ARM        4.347%        4.414%

Five-Year ARM           4.1%           4.195%

15-Year Mortgage     4.565%       4.487%

30-Year Mortgage     5.28%         5.143%

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Here at BankingMyWay, we’ve been beating the drum over the Federal Reserve’s decision to opt out of the mortgage-backed securities market — probably to the point of driving readers crazy. But it really is a big deal, and it is the most prominent reason we’re seeing mortgage rates rise over the past week.

With the Federal Reserve’s $1.3 trillion “support system” unplugged — it officially ended last week with the $6.074 billion the Fed spent on mortgage securities — Uncle Sam’s till has been emptied and the mortgage-backed securities market is now back in the hands of private investors.

Once artificial stimuli are removed, lenders no longer can sit back and offer lower interest rates on mortgage security purchases. With demand low, rates can only go up (to attract more cash to the MBS market), and that’s largely what we saw last week.

Not helping matters for mortgage-seekers this week is the lousy climate for U.S. Treasury auctions. By and large, demand has been weak, especially for overseas investors that Uncle Sam has come to count on, like China and India. Once again, to spark some interest in U.S. Treasuries, the U.S. government has to raise Treasury bond interest rates to stir the pot and get those overseas investors back into the market.

Another factor that likely helped boost mortgage rates is the U.S. jobs market. While Friday’s unemployment rate from the Department of Labor wasn’t a blockbuster (it came in at a net plus of 162,000 jobs) it was the first month in two years where the job market actually saw an uptick in jobs. Of course, 48,000 of those jobs were temporary jobs created by the U.S. census, so let’s take it with a grain of salt.

After all, the U.S. unemployment rate remains at 9.7%, and the Obama administration is taking great pains to warn Americans that a jobs turnaround will move at a glacial pace.

But if the economy continues to add jobs, and U.S. companies start recording healthy quarterly profits, we can expect to see mortgage rates continue to inch upward.

So, the moral of the story? If you can lock in a rate at about 5%, don’t think twice. While nothing is etched in stone, chances are that mortgage rates are back up for a while — maybe a long while.

In the meantime, to grab the best mortgage rate before the market climbs too high, check out BankingMyWay’s Mortgage Rate Search. Week-to-week, it’s your best bet for finding the best mortgage rate deal possible.

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