Interest Rate Trends – Current Mortgage Rates Up?
For the last several months, overall interest rates and mortgage rates have been a downward trend channel. In late May and early June, it seemed that the trend channel had been broken and overall rates were going to head higher. The 30 year fixed rate mortgage went from 4.8% to 5.59% in just a few short weeks. After the high of 5.59%, mortgage rates fell all the way back down to where they were earlier this week, which was 5.05%. It looks as if this might have been the short term bottom. The 10 year treasury rate yield has seen a bounce and it looks as if mortgage rates are going to follow.
If the 10 year treasury rate does get a strong bounce, where are mortgage rates going to end up? This is a very tough question to ask as there is no way of knowing what the government is going to do to push mortgage rates lower. One thing is for certain, the Federal Reserve Bank is going to do everything they can to cap interest rates. It is very possible that they may have run out of ammo for this fight though.
If the 10 year yield goes all the way to 4% it is likely that we will see the 30 year fixed rate mortgage around 6%. If the 10 year yield breaks the 4% resistance level, mortgage rates may go MUCH higher than that. This is very bad news for anyone who has waited to refinance or buy that first home. It might be a good time to get out there and try to lock into a mortgage rate under 5.25% before we see a strong jump in the overall interest rate market.
The current interest rate trend seems to have turned the corner and is showing signs of higher interest rates. Do not let this alarm you, but please make sure to take advantage of low rates while they are still available because they may not last for much longer.
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2 Comments on Interest Rate Trends – Current Mortgage Rates Up?
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15 Year Fixed Mortgage - Is It Right For You? - Economic Conversation on
Thu, 16th Jul 2009 9:28 am
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Current Home Mortgage Rates Set to Move Higher - Economic Conversation on
Mon, 20th Jul 2009 9:09 am
[...] factor that you must consider is your future. When you decide on a 15 year fixed mortgage, you will be paying on your mortgage HALF the amount of time of most people. Is your objective to [...]
[...] the current economic situation. Home prices continue to plummet each month and higher mortgage interest rates will just accelerate the decline in prices. In January, the 10 year treasury rate yield started [...]
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