Refinance Home Loan Rates – Refinance Below 4.75% Today?
Posted on | November 11, 2009 | 1 Comment
Refinance home loan rates continued to go lower as the month of November progresses. At the beginning of October very few people thought that mortgage rates would continue lower. The federal reserve bank announced that it was going to stop buying US treasuries which in turn would cause treasury yields to increase. As treasury yields increase it is often the case that mortgage rates also increase.
Since the beginning of October treasury yields have in fact increase the mortgage interest rates have not followed. This is very unusual as there is a strong correlation to treasury yields and mortgage interest rates to go back to 1971. As treasury yields increased mortgage rates tend to follow and a similar fashion.
Back in May treasury yields have been increasing for quite some time and it took mortgage rates several months to react. When mortgage rates finally did react they move drastically in a short period of time. In one week mortgage rates moved up as much as .75%. No one knows if this is going to happen again but there is a strong possibility that it will.
If treasury yields continue to move higher and reach their summer highs near 4% there is no doubt that mortgage interest rates are going to have to move up. The government has done a great job to keep interest rates low but eventually the market is going to set interest rates. The federal reserve bank is going to stop buying mortgage-backed securities in March 2010 which will also help push mortgage rates higher.
If you plan to wait and hope that mortgage interest rates continue to go lower and reached all-time lows than you might be making a very risky bet. If treasury yield increase in mortgage backed securities are no longer bought by the federal reserve bank mortgage rates are going to move higher is just a question of when and how much. Many analysts are predicting 6.5% or higher for mortgage rates by the middle of 2010.
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Author: Mike Garner
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November 12th, 2009 @ 9:15 am
[...] Refinancehome loan rates continued to go lower as the month of November progresses. At the beginning of October very few people thought that mortgage rates would continue lower. The federal reserve bank announced that it was going to stop buying US …Read Original Story: Refinance Home Loan Rates – Refinance Below 4.75% Today? – Subprime Blo… [...]