Current Mortgage Rates Drop But That Will Change!
Posted on | July 16, 2009 | 2 Comments
Freddie Mac released their weekly mortgage rates survey and the data showed that the average 30 year fixed mortgage rate dropped to 5.14%. While this seems like great news, do not let the past confuse the future. The data is the portrayal of mortgage rates over the last week; that trend greatly changed this week as the 10 year treasury rate yield has moved well above its 50 day moving average. One thing is for certain, current mortgage rates are going to move higher.
The record low for the Freddie Mac weekly survey was set on April second and that data showed mortgage rates at 4.78%. Since then overall mortgage rates have been quite volatile; moving all the way up to 5.59% and now back down to 5.14%. From CNBC:
The drop in rates is a positive for the U.S. housing market, which has been showing some signs of stabilization, with sales rising and home price declines moderating in many regions of the country.
This is fine and dandy but interest rates are going to head higher! I am not sure which regions of the country they have been looking at, but from every indicator I see, home prices are still falling. Also from CNBC:
Mortgage rates remained above 5 percent for a seventh-straight week. Experts say mortgage rates at 5 percent and below are the levels needed to make a significant impact on home loan demand.
Well, it looks as if the housing market is going to get a lot worse because we are not going to see mortgage rates under 5% for quite some time unless the government starts printing A LOT more money. There is only so much money the Federal Reserve Bank can inject into the economy. It looks like the market is finally going to set interest rates and that means we are going to see mortgage rates push their way towards 6%.
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July 16th, 2009 @ 11:16 am
[...] your payments will be very large. If you get a 30 year mortgage, you will end up paying a higher interest rates, but your monthly payments will be more [...]
July 17th, 2009 @ 8:51 am
[...] year treasury rate yield has moved up significantly in the last week so we can expect to see much higher mortgage rates next week. The 10 year yield has moved up over 10% this week which is very bad news for the idea [...]