Interest Rates Forecast – Will Mortgage Rates Drop In September?
Posted on | August 17, 2009 | 4 Comments
Make sure to use Subprime Blogger to get your Interest Rates Forecast. There are also several articles on getting low Wells Fargo Mortgage Rates.
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
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