The current interest rates forecast is extremely clouded as interest rates have been all over the map in the last few weeks.  We saw mortgage rates stablize in July but now they have went crazy in August.  We have seen average mortgage rates go from 5.05% to 5.5% and all the way back down to 5.1% in just three short weeks.  This begs the question “will mortgage rates drop in September?”  Well, only time will answer that question, but it sure looks like the range for daily mortgage rates is between 5% and 5.5%.

The one bit of news that will affect mortgage rates is the fact that the Federal Reserve Bank is going to stop buying US Treasuries by the end of September.  It seems that every time mortgage interest rates get close to 5.5% we hear that the Fed is going to buy up more treasuries.  Now that this is not the case, will we see mortgage rates start to move up?  It is usually the case that when treasury yields push higher, mortgage rates follow them.  If the Fed stops buying treasuries, it is likely we will see an increase in the yields.

For quite some time I have expected the 30 year fixed mortgage rate to push towards 6% but is just has not happened.  As stated earlier, every single time mortgage rates start to move up, we see Ben Bernanke on the news reporting that the Federal Reserve Bank is going to buy up more United States debt.  This is fine for the time being but eventually they are not going to be able to print money to just buy up their own debt.

Overall, the interest rates forecast continues to be clouded but it might clear up in the near future when the Federal Reserve Bank stops buying US treasuries.  This might be a signal that the government is going to take their hand out of the pot and we are actually going to get to see the markets set interest rates.  If this is the case, we are likely to see a whiplash effect as mortgage interest rates have been held down for quite some time.  Expect to see mortgage rates push towards 6% when the government stops holding interest rates down.

Luckily there are still many mortgage lenders out there who are advertising mortgage rates under 5%.  You have probably seen these ads all over the Internet and television.  It would be a very wise decision to get in contact with these companies now before mortgage rates start to push higher and move toward 6%.  You will never know what mortgage rate you can get until you actually contact the lenders!

Author: Jeremy North

When deciding to refinance getting the best rates available is extremely important.  One of the top searches on google for refinance is “refinance best rates.”  The best rate that you can get is solely based on your current financial status.  If you have a very good credit score and your home has increased in value since you bought it, you are likely to get a lower refinance rate than home owners who do not have that luxury.  I would strongly suggest you get a very up-to-date appraisal value before you think you owe less than what your home is worth.

Another thing to consider when looking for the best rates when refinancing is the closing costs.  If you are not going to better your current mortgage rate by at least one full percentage point, it is often not worth it to refinance due to the closing costs.  I would imagine that some of these closing costs have gotten a little out of hand with the current economy.  Mortgage lenders are doing everything they can to make a few extra dollars, so adding a few administrative fees onto a mortgage would not surprise me at all.

Overall, the best refinance rates are dependent on your financial situation.  If you feel you have done very well in making sound financial decisions, you could get an extremely low rate that will save you thousands of dollars over the course of a mortgage.

It is usually the case that mortgage rates and the 10 year treasury rate trade side by side in a strong correlation.  Well, that was not the case for the first five months of 2009.  During the strong move higher in the treasury rate, mortgage rates were hitting new lows each week.  This changed quickly in June as mortgage rates have gone from 4.8% to 5.59% in a matter of a few weeks.  Now that the 10 year treasury rate has hit the 4% resistence level, it would seem that interest rates are going to stabilize and could fall as the 10 year falls.

The problem is the disconnect with interest rates and the 10 year rate.  The reason for this is the government’s interaction with interest and mortgage rates. Ben Bernanke has printed as much money as he possibly can to keep mortgage rates low, but no matter how hard he tries, free markets are eventually going to set rates.  An interest rate forecast projects volatile mortgage rates because the government is fighting the idea of free market capitalism.

Make sure to stay up to date on the housing and mortgage market with the mortgage rates forecast I provide.