Home Mortgage Loan Rates – Interest Rates at 5.2%
Posted on | August 31, 2009 | No Comments
Home mortgage loan rates have been between 5.05% and 5.2% for the last two weeks. Mortgage interest rates seem to be in a very tight range before the month of September starts. It is going to be a very interesting month for average mortgage rates because the 10 year treasury rate is no longer in an uptrend, but the Federal Reserve Bank is going to start easing the purchases of US Treasuries. The is a conundrum that will be interesting to watch play out.
If the Federal Reserve Bank stops buying US treasuries, one would think that home mortgage loan rates would increase because treasury yields would increase. This makes sense, but treasury yields just broke there eight month long uptrend and the 50 day moving average is now down trending. One would think that the 50 day moving average would serve as overhead resistance and this would cause mortgage interest rates to decrease.
So what exactly is going to happen? That is the question that can only be answered in time. Now that mortgage rates have been between 5% and 5.5% for about four months, something is eventually going to have to give. Either the Federal Reserve bank is going to continue buying treasuries and mortgage rates are going to drop OR the Fed will take their hand out of the pot and we are going to see higher overall mortgage rates.
With all the hard work that Ben Bernanke and President Obama have done to keep interest rates at all time lows, it is just very hard to believe that they are going to let mortgage rates go up. This is not to say it won’t happen, but it is just very hard to believe. Eventually, when everything sorts itself we will see higher interest rates because the current mortgage interest rates are artificially low due to government actions.
Overall, now is one of the best time to go through the home buying or refinancing process. If you have been thinking about doing this but have been on the fence, it might be time to jump off the fence and hit the ground running. With mortgage interest rates near 5% and the 10 year treasury rate below its 50 day moving average, now is the time to get started on that mortgage application so you can lock in at a historically low mortgage rate.
Author: Heather Best
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