30 Year Fixed Mortgage Rates – Interest Rates Moving Higher in November
Posted on | October 28, 2009 | No Comments
The average for 30 year fixed mortgage rates have been at or below 5% since the beginning of September. Now that the Federal Reserve Bank is going to stop buying US Treasuries at the end of October we can expect mortgage rates to start moving higher. It is very unlikely that mortgage rates are going to move drastically higher but if the 10 year yield gets close to 4% like it did this summer we can expect to see mortgage interest rates around 5.6%.
If you have been thinking about refinancing your current home mortgage now might be one of the best times to do it. If you continue to wait, you might find that mortgage rates are moving up towards 6% before you know it. At the moment there are still many mortgage lenders who are advertising mortgage rates under 5% so take advantage of these rates.
The 10 year yield and the 30 year fixed mortgage rate have a very strong relationship that began in 1971. As one goes up the other usually follows shortly after. The 10 year yield has hit support at the 200 day moving average and has broken through its 50 day moving average. If there is not a pullback in the very near future we can expect to see the 10 year yield make its way towards 4%.
The government is working very hard to keep mortgage interest rates near all time lows so this is going to do a lot to slow the increase of mortgage rates. Eventually, when the Fed takes their hand out of the pot, the market is going to set interest rates. The issue at hand is the fact that the Fed has created artificially low mortgage rates and we could see a whiplash affect when the Fed does stop holding rates lower.
You do not want to wait to refinance your home until after this happens. The Fed is planning on buying mortgage backed securities until March 2010 so there is no extreme rush. With that being said, the conclusion of US Treasury purchases means that we will definitely see mortgage rates start to make their move higher. Take advantage of low rates today instead of waiting.
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Author: Alan Lake
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