Mortgage Rates Explode Upward

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Three weeks ago, according to quasi-government mortgage giant Freddie Mac, the average rate for 30-year fixed mortgages stood at 4.82 percent. This week, the average rate was 5.59 percent.

The accompanying graph shows that while mortgage rates are still below the levels that prevailed before the financial crisis kicked into high gear, their upward move has been unusually violent and has reversed a substantial portion of the post-crisis decline.

This rate increase pushes up the monthly payment on a given 30-year fixed loan amount by 9 percent -- a significant amount for those running the rent-versus-buy exercise at this point. I've speculated that ultra-low mortgage rates were a key driver of the spring rally. If rates stay up at these levels, we will get to see whether that was true after all.

-- RICH TOSCANO