Where are rates headed - July 2009 Update
The complexity of the current economic situation makes it extremely difficult
to accurately forecast where rates are headed from here. Fear has driven
the stock and bonds markets in the last many months with the government
and the federal reserve also playing roles in keeping rates lower. The Fed
has stepped in to buy treasuries (known as QE or quantitative easing) in the
first half of 2009, which has helped keep treasury yields lower. The demand
for US debt did soften in late May and into June, which did drive yields up to
close to 4% on the 10 year treasury. Yields have since dipped back to the
3.2-3.4% range. Mortgage rates have subsequently come down as well.
The million dollar question that everyone is asking is when will the demand
for US debt falter and the need for yields to head higher to keep investors
interested in US debt? The fact that the US government is auctioning off
billions of dollars of debt every week is eventually going to force treasury
yields higher and mortgage rates along with it. Keep in mind that mortgage
bonds are competing directly with US debt so mortgage rates will have to
move higher to stay competitive.
I personally feel that rates could drop slightly lower, but will probably move
sideways or go slightly higher over the coming weeks. The key is the news
that comes out of the government and stock market. Any piece of news that
spooks the markets and drives them lower could lead to lower interest rates
or quite possibly, higher rates as there is no clear pattern of how such
events can impact mortgage rates.
If you find a rate that works for you, lock it in and move on.
Back to Loan Services
The complexity of the current economic situation makes it extremely difficult
to accurately forecast where rates are headed from here. Fear has driven
the stock and bonds markets in the last many months with the government
and the federal reserve also playing roles in keeping rates lower. The Fed
has stepped in to buy treasuries (known as QE or quantitative easing) in the
first half of 2009, which has helped keep treasury yields lower. The demand
for US debt did soften in late May and into June, which did drive yields up to
close to 4% on the 10 year treasury. Yields have since dipped back to the
3.2-3.4% range. Mortgage rates have subsequently come down as well.
The million dollar question that everyone is asking is when will the demand
for US debt falter and the need for yields to head higher to keep investors
interested in US debt? The fact that the US government is auctioning off
billions of dollars of debt every week is eventually going to force treasury
yields higher and mortgage rates along with it. Keep in mind that mortgage
bonds are competing directly with US debt so mortgage rates will have to
move higher to stay competitive.
I personally feel that rates could drop slightly lower, but will probably move
sideways or go slightly higher over the coming weeks. The key is the news
that comes out of the government and stock market. Any piece of news that
spooks the markets and drives them lower could lead to lower interest rates
or quite possibly, higher rates as there is no clear pattern of how such
events can impact mortgage rates.
If you find a rate that works for you, lock it in and move on.
Back to Loan Services
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to find out about:
to find out about:
5 Bedrooms, 2 plus baths
1810 square feet
1810 square feet
$735,000 w/ Roof Credit
11574 Estrella Court
Dublin, CA
11574 Estrella Court
Dublin, CA
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Joseph Mendes, MBA
Realtor and Mortgage Broker
Your Realtor and More
510-281-0501
Realtor and Mortgage Broker
Your Realtor and More
510-281-0501
®
®