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Wells Fargo Refinance Mortgage Rates – Applications Drop, Rates Still Low

Posted on | October 29, 2009 | No Comments

Wells Fargo refinance mortgage rates remain near 5% but we have seen a drop in mortgage applications.  This week mortgage applications dropped 12.3% with the expiration of the first time home buyers tax credit looming.  If the tax credit expires without and extension then there is a good chance that we will see a continued decline in mortgage applications; this is very bad news for the housing market.

With mortgage refinance rates still around 5% it is a great time to refinance but home owners are reluctant to do just that.  Refinance applications dropped over 16% last week as home buyers are hoping that mortgage rates drop back to the March lows around 4.6%.  Only time will tell if this is going to happen but it seems very unlikely at this point.

The Federal Reserve Bank is going to stop purchasing US Treasuries which is likely to push treasury yields up.  If treasury yields start to move higher it is almost a guarantee that mortgage rates are going to increase as well.  The 10 year yield is currently above its 50 day moving average and has been in an up trend since the beginning of October.

If the up trend in the 10 year yield continues there is a good chance that the next level of resistance is going to the the 4% year high we saw during the summer.  If the yield moves up to the 2009 high then mortgage interest rates are likely to move up to 5.5% or higher.  This summer we saw the 2009 high in mortgage rates at 5.59%.

Refinancing in the current mortgage environment is not a bad idea.  With mortgage rates still around 5% many home owners stand to benefit by refinancing to a lower mortgage interest rate.  If you can save a full percentage point by refinancing then it might be a good idea to get out there and contact some lenders.  Many lenders are advertising mortgage rates under 5%, including Wells Fargo, so do not miss this opportunity.

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Author: Alan Lake

Category: Wells Fargo Mortgage Rates

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