If you have been waiting for mortgage rates to drop below 5% you might have to wait a very long time.  The uptrend in treasury yields began way back in January and it looks like it is going to continue through the fall.  It almost looks as if mortgage rates above 6% is more likely than mortgage rates below 5%.  No one can predict the future, but if the treasury yields continue higher, it is hard to imagine that mortgage rates are going to stay as low as they currently are.

Luckily there are still mortgage lenders that are advertising mortgage interest rates below 5%.  You will never know if you have access to these low rates until you contact the actual lender.  You may not want to give them all of your financial information but by giving them a call and ask generic questions you could find out a lot about the current mortgage market.

• Daily Mortgage Rates
• Mortgage Rate Forecast
• Mortgage Rate Trends

If you have been waiting to refinance or get  your first mortgage now might be as good of a time as ever to speed up that process.  There are still lenders that are advertising mortgage rates under 5%.  While you may not know if you can get rates this low, you will never know for sure if you never ask.  Most of the ads lead to an 800 number that allows you to speak to a representative.  You may not want to give the representative all of your financial information but it might be wise to at least give them a call and see what interest rates are floating around out there.

It is definitely the case that even the lowest mortgage rates are moving higher.  Now that average mortgage rates are above 5.3%, are we going to see a push higher towards 6%.  No one knows the answer to that, but I wouldn’t want to be waiting on the sidelines as mortgage rates continue to move up!

• Daily Mortgage Rates
• Mortgage Rate Forecast
• Mortgage Rate Trends

Home loan interest rates, especially 30 year fixed mortgage rates, are sure to head up next week as the 10 year treasury rate yield continue to rise as the week closes out.  This week has been a very strong week for the yield as it has moved up over 10% for the week.  There is little doubt that this is going to cause average mortgage rates to move higher.  It will be very interesting to see what a 10% weekly move in the yield will do to overall interest rates.

This is not a surprise to me at all as I have been harping on the fact that mortgage rates were at a very important junction in the road.  I will admit I overestimated the lower trendline for the 10 year treasury rate yield, but I quickly corrected myself when I saw the movement earlier this week.  It looks as if the 10 year yield is going to make a strong push towards 4% which means the 30 year fixed mortgage rate will make a strong case for 6%.  It will be very interesting to see what this does to the “recovering” housing market.

Most of you know that I do not feel that the housing market is truly recoving; especially with foreclosure listings reaching new highs.  There continues to be too much supply on the market and the unemployment rate continues to rise.  It will be at least another six months before we see home prices bottom especially with mortgage rates moving up.

Average mortgage rates have been at historical lows for quite some time now as the government has attempted to put a cap on treasury rates.  Unfortunately, they cannot cap the 10 year treasury rate forever and when the government runs out of ways to push interest rates lower, it is likely we are going to see a sling shot effect.  There is little doubt that we are going to see inflation rear its ugly head in the next few years.  The Federal Reserve Bank has been printing money at will and the value of the dollar is likely to decrease greatly.

With this bit of knowledge we must decipher what inflation will do to average mortgage rates.  Throughout the history of the United States, we have seen that inflation causes much higher mortgage rates.  If we look at the most recent inflationary period, the 1970s and early 1980s, we see that inflation was running rampant.  The price of commodities skyrocketed and the 10 year treasury rate reached 15% at the peak in 1982.  If you were alive, you remember daily mortgage rates around 17% during this time; very bad news for the future of mortgage rates in today’s economy.

No one knows if inflation will be nearly as bad as it was in the 1970s and 1980s but one thing is for certain – we have never seen this type of government debt in the history of our country.  The problem is that Ben Bernanke thinks he can print his way out of this recession.  Basic supply and demand shows that the more you have of a good or service, the less it is going to be worth.  If Bernanke continues to print billions of dollars to buy back mortgage backed securities and assist in other stimulus programs, the value of the dollar WILL fall.

If you feel that inflation is going to show itself in the next few years, make sure to put your money in inflation investments.  There are no better investments during inflationary periods than commodities.  If you do some research on how commodities traded during the last period of inflation, you will see tremedous gains.  Once again, we have no idea how bad inflation is going to be, but we are definitely going to see it in the near future.

Average mortgage rates have been all over the map lately, mostly due to government actions.  Over the last three months the government has bought back trillions in mortgage backed securities as well as auctioning billions in debt through treasury notes.  These two actions have caused mortgage rates to stay artificially low as the government is doing everything in their power to put a ceiling on average rates.  This is very bad news for the long term though.

If and when the economy gets better mortgage rates are eventually go the be set by the free market.  If this is the case, we are likely to see mortgage rates MUCH higher than they are now.  When this happens, we will see another drop in home prices as higher mortgage rates  will cause sellers to drop their prices.  The sad part about it all is that this is likely to happen when most of America feels that the housing market is finally getting better.

The most troubling issue I see is that it may take MANY years for the housing market to find a bottom and the whole time the government is going to continue to try to force average mortgage rates lower.  Well, the longer it takes, the more of a whiplash effect it is going to have.  We could see average mortgage rates go up two or three percent in less than a year if this continues.  Eventually the government is going to run out of ammo and the foreigners are going to stop buying our bonds and paper money.  It is very bad news when this happens, but maybe that is exactly what we need right now.

The only reason that mortgage rates are not in complete bull mode is the fact that the government has created artificial mortgage rates by buying up mortgage backed securities.  I have stated many times over that this would come back to haunt them and maybe that is happening sooner rather than later.  The 10 year treasury rate is likely to determine the mortgage rate trend over the next few weeks, so lets see where the treasury rate goes.

Make sure to use Subprime Blogger for your mortgage rate predictions as well as keeping with with daily mortgage rates.

Mortgage rates are definitely headed for a very interesting week as volatility has greatly increased in rates over the last three weeks.  It has been the exact opposite of the stock market; as the volatility of the stock market has returned to moderate levels, the volatility of mortgage rates has skyrocketed.  That is sure to continue as the 10 year treasury rate has seen a strong pullback from 4%.  This is likely going to cause average mortgage rates to pull back, but who really knows how much.

I truly hope that we see some stabilization in rates because these unusual moves are making it hard for both the lenders and the borrowers.  As a borrower going into a loan office, you really have no idea what rate you are going to get because rates could have moved as much as .75 in ONE day as they did a few weeks ago.  The same is true for the lenders.  When customers are coming in hoping to get a specific rate, lenders are not able to give a solid quote as rates will have greatly once the mortgage application process has begun.  For more on this, check out Mr. Mortgage’s article.

Ultimately, no one really knows where rates are headed, but it is likely to be a bumpy ride this week.  Watching the 10 year treasury rate can give us some prediction on where mortgage rates might go, but as I have said in the recent past, current mortgage rates and the 10 year have not trended in the same strong correlation as history suggests.  I think as we get deeper into the summer we will see this correlation tighten as the 10 year and mortgage rates will follow either other.

June 19th – The newest article on average mortgage rate is available here: Average Mortgage Rates Lower Due to Government Actions? In essence, the government continues to make moves to push daily mortgage rates lower but it is creating artificial mortgage rates; is this really good for the economy?

Average mortgage rates have been going higher in June and that trend could continue.  Since the end of May, according to Freddie Mac average mortgage rates have gone from 4.8% to 5.59%.  This is a jump that the housing market did not need.  For the last three years we have seen steady declines in the value of American homes.  President Obama and Ben Bernanke did everything in their power to keep average mortgage rates under 5% but free markets eventually won out in early June.

If home prices did not find a bottom when mortgage rates were under 5%, what is going to happen with rates trending higher with the possibility to exceed 6%.  There is no doubt that sellers are going to have to lower their prices to sell their homes, but can prices go down any more?  A 32% average drop since the top in July of 2006 has been a very rough experience for many, but imagine if the worst has yet to come.

We all know that the subprime mortgage crisis changed the entire mortgage industry, but could it be the cause of a 50% decline in home prices?  I honestly believe that if the government had left everything to free markets, we would be out of this housing downturn much quicker.  I am by no means saying it would be over by now, but with the fluctuation in average mortgage rates things are going to get very tough for home buyers and sellers.  Now that the Obama administration has dove headfirst into printing money in an attempt to lower mortgage rates, what’s next?  That didn’t seem to work out too well and we are several TRILLION dollars deeper in debt.

Please make sure to use Subprime Blogger to get your analysis on mortgage rate trends.  With the Obama administration printing such a great deal of money, inflation is very likely, so make sure to make wise inflation investments starting today.