The current forecast for interest rates is very hard to decipher at this time. In late July, fixed rate mortgage of 30 years tended much lower and many people thought that we'd have a breakdown below 5%. As soon as that happened, the production rate 10-year Treasury began a strong upward trend that showed a weekly increase of 10%. This pushed total mortgage rates much higher.
After the 10% increase in the rate of the Treasury yield, the mortgage rates went from 5.05% to end up 5.5% in just five short days. At this point, many analysts convinced that we would see the beginning of constant flux rates to 6%. With production up 10 years tending it was almost inevitable, right? Well, not so fast. At the time of loan rates hit 5.5% had a speech by Federal Reserve Bank said they would do everything in their power to maintain historically low interest rates.
After this speech by Federal Reserve Bank, saw a drop rates steady all the way down to 5.1%. We are now seeing mortgage rates at 5.2% but that is likely to change in the very near future. It seems at the time of establishing a direction, something happens to mortgage rates of the forces in the opposite direction. It will be interesting to see where we go from here but it is not easy to forecast, that's for sure.
Sunday, November 8, 2009
