Mortgage Rate Trends – April 14th – Rates Back to 5%?

Posted on | April 13, 2009 | 1 Comment

As we all know, mortgage rates have been under 5% for a few weeks now and it is almost becoming a normal thing to hear that rates are at historic lows.  Obviously, mortgage rates cannot hit historic lows every single week because this is not how financial markets work.  We are definitely going to see a bounce back to around 5% and I think it is going to happen very soon.  Last week we saw a bounce in mortgage rates back up to 4.87%.  I think this week we could see rates get even closer to 5%.

Why will mortgage rates go up?!?  Well, it is psychology and the great number of mortgage applications.  Mortgage lenders cannot keep up with the great number of mortgage applications that they are seeing so they only way to slow the number of applications down is to increase mortgage rates.  The other major aspect of the mortgage market that is going to cause rates to increase is psychology.  When you hear mortgage rate these days you almost immediately hear someone say they are going to go down.  I am a strong believer in going against the crowd and this is a time when everyone thinks rates are going to decline.

Overall, I believe the mortgage rate trend is down, but for the short term, I think we are going to see mortgage rates grind sideways or work their way back up to the 5% mark.

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