Mortgage Rates Forecast – Interest Rates Stay Around 5.15%
Posted on | August 17, 2009 | No Comments
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The current mortgage rates forecast is extremely clouded right now. Interest rates have been all over the place for the entire month of August after a very uneventful July. In July we saw a very narrow range between 5.1% and 5.3% when it comes to the 30 year fixed rate mortgage. At the end of July we saw a huge move forward by the 10 year treasury rate yield which pushed mortgage rates much higher to start August.
In the first week of August, mortgage rates went from 5.05% to 5.5% in less than five days. This move up was mostly due to the strong move by the 10 year yield. Just when most analysts were predicting that average mortgage rates were going to make their way towards 6% we got commentary from the Federal Reserve Bank that interest rates were going to remain historically low. After this commentary, we saw mortgage rates drop all the way back down to 5.1% within two short days. This makes it very difficult to give an accurate mortgage rates forecast.
We currently see mortgage rates around 5.2% but that is likely to change as soon as a Fed speech is made. Is sure seems that every single time mortgage rates inch up towards 5.5% that the Federal Reserve comes out and says they are going to continue to buy United States debt in the form of treasuries. Well, they have recently announced that by the end of September they are going to stop buying treasuries. It will be very interesting to see what happens when the Fed does start pulling out of this commitment.
I would imagine that we will continue to see the uptrend of the 10 year treasury rate yield when the Fed stops sinking money into treasuries. If the 10 year yield continues to push higher, you can expect to see higher mortgage rates, eventually. We have tested 5.5% several times this year but each time the Fed has come to the rescue by printing more United States dollars. Now that this is likely to stop by the end of September, are we going to see mortgage rates break that 5.5%.
The current mortgage rates forecast does remain cloudy but that does not mean you cannot get an extremely low mortgage rate. You have seen advertisements all over the Internet for companies offering mortgage rates below 5%. While you may not know if you have access to these rates, you will never know if you don’t try. It doesn’t hurt to at least contact them and see if you can get a great deal on a refinance or first mortgage.
Author: Jesse Wojdylo
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