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Current Mortgage Rates Could Go Higher

Posted on | July 6, 2009 | 5 Comments

Please use Subprime Blogger to keep up with current mortgage rate trends.  There are also several articles to assist you in getting low mortgage rates.

Current mortgage rates are very likely to move higher in the next few weeks.  Since the middle of June, average mortgage rates have pulled back from an intermediate high, mostly because of the sell off in the 10 year treasury rate.  The government continues to auction off bonds which is saturating the market; this has caused the 10 year to pull back all the way to its 50 day moving average.  After going from 4% down to 3.45%, I find it highly unlikely that we will see the 10 year break the support level of the 50 dma.

Today we are seeing a push higher from the 10 year and I would expect that to continue throughout July.  Current mortgage rates are likely to follow the trend of the 10 year treasury rate as they have a strong correlation.  We don’t know where the 10 year uptrend will stop at, but if it returns to 4% look for average mortgage rates around 6%.  Obviously this would be very bad news for the housing market as it would cause prices to continue to fall.  Maybe this is exactly what we need to finally flush out the bottom in the housing market and start to head higher.

The scary part about current mortgage rates heading higher is the fact that it will reduce the amount of mortgage applications by quite a bit.  There have been several major news headlines stating that mortgage applications have shrunk due to uncertain mortgage rates.  You can be rest assured that the amount of applications will decline even more if daily mortgage rates reach the 6% level.

To make a strong prediction of where mortgage rates are headed make sure to keep up with the 10 year treasury rate.  If the treasury rate starts to head higher, it is almost a given that the 30 year fixed rate mortgage will follow.  I am sure the government will try to keep mortgage rates around the 5% range, but eventually the market is going to set interest rates.

Category: current mortgage rates
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Comments

5 Responses to “Current Mortgage Rates Could Go Higher”

  1. Subprime Blogger / “Home Prices Will Decline by an Additional 5%-7% From the 2006 Peak”
    July 6th, 2009 @ 2:29 pm

    [...] Subprime Blogger be your mortgage news source and help you stay up to date on current mortgage rates.  We offer information on daily mortgages rates and how they correlate to the 10 year treasury [...]

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    July 6th, 2009 @ 7:53 pm

    [...] late May and early June, we are still at levels that most home owners would love to lock in at.  Current mortgage rates are around 5.3% and have been moving sideways over the last few weeks.  Is now the time to [...]

  3. The Financial Suite » “Home Prices Will Decline by an Additional 5%-7% From the 2006 Peak”
    July 6th, 2009 @ 11:31 pm

    [...] Subprime Blogger be your mortgage news source and help you stay up to date on current mortgage rates.  We offer information on daily mortgages rates and how they correlate to the 10 year treasury [...]

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    July 7th, 2009 @ 2:19 pm

    [...] up very quickly which could push mortgage rates above 6%. Subprime Blogger offers information on current mortgage rates and how you can get the rate you want. Making accurate interest rate predictions could save you a [...]

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