30 Year Fixed Mortgage Rates – Interest Rates Above 5%
Posted on | September 24, 2009 | No Comments
The average for 30 year fixed mortgage rates is up to 5.05% early which is a quick increase from 4.91% earlier. Yesterday the Federal Reserve Bank confirmed that they were going to stop buying US Treasuries by the end of October. Some analysts were predicting that they would extend this program to help keep mortgage interest rates near all time lows but that did not happen. The stoppage of these purchases is likely to cause an increase in treasury yields which will push mortgage rates higher.
The Federal Reserve Bank also stated that they are going to stretch out the $1.3 trillion mortgage backed securities purchase program. The initial plan was to end the purchases of mortgage backed securities by the end of 2009 but they have pushed in back to the end of March 2010. By adding an extra quarter to these purchases it is likely to help keep mortgage rates a little bit lower but a lot will be determined by treasury yields.
If treasury yields see a strong rally after October we might see mortgage rates push higher regardless of the mortgage backed securities purchase plan. Since 1971, there is a strong relationship between the 10 year treasury rate yield and the 30 year fixed rate mortgage. When one moves up the other one follows. If there is a strong move by the yields then it is extremely likely that there will be a strong move in mortgage rates as well.
With this knowledge now is the best time to refinance. If you wait until the end of October you might find mortgage rates moving higher. WIth rates currently around 5% there is no reason to delay the home refinance process. The longer you wait the more risky it is going to be that mortgage rates are going to move higher. After the Fed stops purchasing mortgage backed securities and US Treasuries mortgage rates could move up very quickly.
There are many mortgage lenders that are advertising mortgage rates under 5%. This is your opportunity to stay ahead of the crowd and get your home refinance done now. Contacting some of these lenders continues to get easier with the expansion of the Internet. Some of these mortgage lenders actually offer online assistance so take advantage of this.
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Author: Jesse Wojdylo
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