Mortgage Rates Trends – Have We Seen a Bottom?
Posted on | April 7, 2009 | No Comments
As many of you know, I strongly believe in psychology when it comes to financial markets. When everyone and their brother is saying that one direction will be sustained, it is very likely that the opposite will happen; we see it all the time in the stock market. Today, we hear that mortgage rates have one direction to go; lower. While they are likely to head lower over the long term, it would not surprise me at all if we have seen the short term bottom.
I think every single advertisement I have seen in the last week has stated that mortgage rates are going to head lower. Some of the advertisements even display rates as low as 4.25%. This is quite ridiculous as this is definitely not the case. If you look at overall mortgage rates in this country, they have never been under 4.5%, on average. If we have never seen rates under 4.5% why would they advertise it? Well, some super-borrowers have a chance to get rates that low, but they do it mostly to lure you in and sucker you into an agreement with them.
Overall, the long term trend is down, but do not be surprised if we see a short term bounce and start to grind sideways for a few weeks. After that, we will continue to head lower.
Tags: financial markets > lower mortgage > mortgage rates > psychology
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