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Wells Fargo Refinance Mortgage Rates – Rates Set to Move Up?

Posted on | November 4, 2009 | No Comments

Wells Fargo refinance mortgage rates remain at extremely low levels but they could be set to move higher.  The 10 year treasury rate yield has carved out an up trend that began in October and there is a good chance that it continue until the end of November.  The current 50 day moving average of the 10 year yield has held as support and it looks as if the 10 year yield is posed to move higher.

The 10 year yield and the 30 year fixed mortgage rate have had a very strong correlation since 1971 and that has not changed in 2009.  As the 10 year yield moves higher the 30 year fixed mortgage rate eventually follows.  Even though the Federal Reserve Bank has done everything in its power to keep interest rates low eventually the market is going to set rates.

WIth this in mind, there is a very strong chance that the current 10 year yield up trend is going to cause mortgage rates to move up.  It may take a few weeks for mortgage rates to feel the enter effect of treasury yields but it is going to happen.  In May we saw mortgage rates move up as much as .75% in one week because of the 10 year yield up trend.

There is a chance that the 10 year yield could break down below it 50 dma but the 200 dma is not far below this point.  The 200 dma has already served as support a few times so it is likely it will serve as a strong support level again.  If the 200 dma is tested then mortgage rates are likely to grind sideways to down but eventually we are going to see reality kick in.

The Federal Reserve Bank is no longer buying US Treasuries so the likelihood of treasury yields falling all the way below their 200 dma is not get good.  If this is truly the case then now might be one of the best times in history to refinance your current home loan.  With average mortgage rates being below 5% at the moment there is little doubt that many home owners stand to benefit from the refinance process.

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Author: Jesse Wojdylo

Category: Wells Fargo Mortgage Rates

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