30 Year Fixed Mortgage Rates – Interest Rates Up Early
Posted on | September 21, 2009 | No Comments
The average 30 year fixed mortgage rates are up early Monday morning. Mortgage interest rates have been around the 5% level for quite some time and it seems this level is going to continue to be a return point for average mortgage rates. Until we see a move above or below this level with conviction it is unlikely that we are going to deviate from this psychological point. Last week we saw the 30 year fixed mortgage rate get as low as 4.91% but it seems every time we drop this low it bounces right back to 5%.
The 10 year treasury rate yield continues its down trend which is very good news for lower mortgage rates. The 50 day moving average is now trending down which means that it will serve as overhead resistance any time there is a bounce or a short term rally. The 10 year yield is actually rather close to its 50 dma currently. It will be interesting to see if there is a move lower after the yield hits the average. If the move is down, look for mortgage rates to test all time lows.
As the month of September moves forward and October nears it is going to get very interesting with mortgage rates. The Federal Reserve Bank has made it very clear that they want to stop buying US Treasuries by the end of October. If they do in fact stop buying treasuries by this point then we are likely to see a rally in the 10 year yield. If the 10 year yield starts a rally it is almost a guarantee that mortgage rates will move up as well.
For those of you who have been thinking about buying your first home or refinancing now is as good of a time as ever. If you wait until the end of October or even the middle of October you might find that mortgage rates have moved up from the all time low levels. Do not get caught in a bad position by waiting to refinance. You might be stuck in a situation where refinancing would not benefit you because of the costs.
Average mortgage rates are likely to continue lower until the Federal Reserve Bank stops their purchases of US Treasuries. If you wait until after the Fed stops the purchases you could find that mortgage rates are moving higher and very quickly. With the government creating artificial mortgage rates there is likely to be a sling shot effect when they finally do take their hands out of the pot.
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Author: Jesse Wojdylo
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