Rate Shock

By Barbara Kiviat

A bond-market slump pushed the average 30year fixed-rate mortgage to 5.94% last week, up from an all-time low of 5.21% in June. Home buyers need to recalculate how posh a place they can afford. "Are you ready for an increased monthly payment?" asks Anthony Hsieh, CEO of HomeLoanCenter.com

There's no need to make a mad dash for the bank to refinance. The Mortgage Bankers Association forecasts that rates will hover around 6% for the rest of the year. Keep in mind that a 6% mortgage is still a better deal than those we have seen for most of the past 30 years. --By Barbara Kiviat