Refinance Home Loan Rates – Mortgage Rates Moving Higher Into Christmas
Posted on | November 6, 2009 | 1 Comment
Refinance home loan rates have been near historic lows for much of 2009 but that could be changing very quickly. As the Federal Reserve Bank starts to ease their purchase programs we might find that mortgage rates are going to move higher into Christmas. Since March, the Federal Reserve Bank has been purchasing Mortgage Backed Securities (MBS) and US Treasuries.
Recently, early October, the Federal Reserve Bank announced that they were going to stop buying US Treasuries by November 1st. Now that the Fed has stopped this purchase program there is a very good chance that treasury yields are going to move higher, possibly to 2009 highs. In the summer we saw the 10 year yield right at 4%.
If the 10 year yield continues to move higher what is going to happen to mortgage interest rates? If we see the 4% level of the 10 year treasury rate yield tested in the near future you can count on mortgage rates working their way back towards 5.5%. During the summer when the yield hit is high, the 30 year fixed rate mortgage moved all the way up to 5.59%.
The purchases of MBS are going to continue until March 2010 so this is going to keep mortgage interest rates at reasonable levels but what is going to happen when the Fed takes its hand out of that pot as well? No one knows the answer to that right now but it is being assumed that we are going to see mortgage rates in the 6% to 7% range or possibly even higher.
Eventually the market is going to set interest rates and when this happens we are going to see mortgage rates move higher. If you want to wait to refinance you might find yourself staring at mortgage rates closer to 6% than 5%. With this in mind it is a great idea to get out there now and see if you can lock in to a low mortgage rate.
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Author: Alan Lake
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One Response to “Refinance Home Loan Rates – Mortgage Rates Moving Higher Into Christmas”
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November 6th, 2009 @ 6:34 pm
all opinion. the govt is hell bent on keeping rates low.