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Interest Rate Predictions – Have Mortgage Rates Bottomed?

Posted on | August 17, 2009 | 2 Comments

Please use Subprime Blogger to get your Interest Rate Predictions.  The government is working hard to keep interest rates historically low so make sure to keep up with the trends.

Interest rate predictions can be quite difficult to make because the government is doing everything they can to keep rates at a historically low level.  This means that the markets are not setting interest rates which is the exact reason making predictions is almost impossible.  It seems as if the overall market is signaling that interest rates should be much higher but the Federal Reserve Bank continues to keep overnight rates at almost zero so there is no way for rates to move up.

Mortgage rates have also remained at a historically low level because of the low interest rate on the Fed Funds Rate. Once again, the market continues to signal that these rates should be higher, but it will not be the case as long as Ben Bernanke and the Federal Reserve Bank continue to push interest rates lower. It will be interesting to see how they finally ease out of this without causing a whiplash effect that sends interest rates much higher.

When giving interest rate predictions, we usually look at the 10 year treasury rate yield and see where it is trending. If the 10 year yield is trending higher, we are likely to see mortgage and interest rates move up.  Well, the 10 year yield has been trending higher since the beginning of 2009 yet we still have not seen a strong move up in mortgage rates.

The highest we have seen mortgage rates in 2009 is 5.59% which is still historically low. Eventually the overall market is going to set interest rates but it probably won’t happen until after September.  The Federal Reserve Bank is going to start easing on the purchase of US Treasuries by the end of September.  This is likely a bullish sign for the 10 year treasury rate yield which should push interest and mortgage rates higher.

Who really knows with the current state of affairs though; we might see mortgage rates under 5% for all I know. Interest rate predictions will remain very difficult for a few more months as the government is still playing a big part in the historically low mortgage rates.  With this being the case, now is one of the best times ever to refinance your current mortgage or by your first home.  There are many advertisements out there for mortgage rates under 5%.  You will never know if you can get a mortgage rate this low if you don’t at least contact them and see what type of deal they can give you.  Take advantage of this great time and get out there and get a low mortgage rate!

Author: Alan Lake

Category: Interest Rate Predictions
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Comments

2 Responses to “Interest Rate Predictions – Have Mortgage Rates Bottomed?”

  1. Brandon
    August 17th, 2009 @ 11:50 am

    Hi, I had a question for you about your blog. Could you please send me an email? Thanks!

    Brandon

  2. Figue
    September 9th, 2009 @ 4:26 pm

    Hi, will FHA Jumbo rates go lower than 5.5%.
    I have been offered to lock a 5.5% for a FHA Jumbo loan and do’t know if wait a bit more for Jumbo rates to go down again to 5.0%. I’m not sure if I’m being realistic for being waiting for the FHA regular to go back to the 4.5% and the FHA Jumbo to the 5.0%.

    Any suggestions?
    Thanksss!
    Figue

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