Refinance Now! Freddie Mac Predicts Mortgage Rates to Increase by March 2009
Posted on | January 2, 2009 | 3 Comments
Refinance has been the buzz word of the real estate and financial markets since the beginning of November when mortgage rates started to fall. For nine consecutive weeks, the 30 year fixed rate mortgage has declined. Three of those weeks have been fresh historic lows. With that knowledge, many Americans feel they should wait to get a lower rate as the overall trend is down, but this might come back to haunt them. Freddie Mac actually predicts mortgage rates to start increasing as early as March of 2009, so refinancing now might be the best option.
With the unemployment rate increasing for the last five quarters, it is easy to see why the economy is struggling. The underpinning of the struggling economy is the falling housing market which has helped to cause the increasing unemployment rate. Housing starts and total home sales continue to fall at historical rates. All of these factors have caused the government to do everything to decrease mortgage rates, but Freddie Mac sees rates increasing as early as March 2009. If this is in fact true, it would behove all home owners to consider refinancing now instead of later.
Overall, no one knows if mortgage rates will in fact increase, but eventually they will have to bounce. Overall it is a downtrend, but it would not be surprising to see rates bounce back as early as March. Even if rates do bounce, they will not start up trending until the overall economy starts to improve and the unemployment stabilizes or starts heading lower.
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3 Responses to “Refinance Now! Freddie Mac Predicts Mortgage Rates to Increase by March 2009”
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January 3rd, 2009 @ 7:14 pm
I’m confused by your “double-speak”. What does this mean, “Even if rates do bounce, they will not start up trending until the overall economy starts to improve”? If they bounce, are they not uptrending? And if they bounce but are not up-trending, do I have a reason to be concerned – especially if my current ARM rate is a point below prime? Please embellish so taking meaningful action is more possible.
Thanks.
January 3rd, 2009 @ 9:53 pm
When looking at an overall long term trend, there will be short term bounces, but that does not mean the long term downtrend is broken. That is what is meant by this statement. We see a short term bounce, but nothing that lasts for more then 6 months.
May 29th, 2009 @ 7:30 pm
I’m more confused now. Is this recent up swing in refinancing rates this past week going to be a bounce trend, or will it go back to a lower rate once Fannie Mae, etc gets it together? I don’t see the employment rate doing anything for awhile but staying high. Honestly I don;tquite get what sets the rates to rise at all.