Refinance Home Loan Rates – Mortgage Interest Rates Volatile in 2010?
Posted on | December 28, 2009 | No Comments
Refinance home loan rates have been very low for much of 2009. Recently, around the end of November, we saw the 30 year fixed mortgage rate around 4.5%. Since this time mortgage interest rates have moved all the way up to 5% which is greatly due to the move higher in the 10 year treasury rate yield. If the 10 year yield continues its uptrend then it is likely that we will see volatile mortgage rates in 2010.
For much of 2009 we saw the 30 year fixed mortgage rate around 5%. The highest level that the 30 year fixed mortgage rate reached was 5.59% and the lowest it reached was 4.49%. It will be very interesting to see if the average for the entire year will be below the psychological 5% mark. Recently, we have seen mortgage rates move higher as 2010 is just around the corner.
In 2010 the Federal Reserve Bank is going to stop buying mortgage-backed securities which is likely to push mortgage rates higher. Bill Gross of PIMCO feels that mortgage rates will move up another .5% to 1% when the Fed stops buying mortgage-backed securities. The question that we must wonder is where will mortgage rates be at that time in late March.
There is little argument that the purchases of mortgage-backed securities throughout 2009 has been one of the main reasons mortgage rates have stayed so low. With the Fed taking their hand out of the pot it will be very interesting to see how volatile mortgage rates are over the next year. Do not be surprised to see the Fed extend this program if the housing industry does not recover as expected.
If you have been thinking about refinancing your home loan now is one of the best times ever to get this done. If there is any pullback in the 30 year fixed mortgage rate in the next week we are going to see mortgage interest rates below 5% to start 2010. By refinancing under 5% you are likely to save several thousand dollars a year on your current home loan. Do not let this opportunity pass you by.
Author: Alan Lake
Comments
Leave a Reply