Mortgage Rate Trends - Trends Showing Higher Mortgage Interest Rates [mortgageloan-processor.blogspot.com]
Home mortgage rates continue to hit new lows, but home loan demand only inched up last week as concerns about the economy kept demand pent up. Applications to buy or refinance homes rose by less than 1% in the first week of August, in the face of 30-year loan rates at a record low of 4.57%, according to the Mortgage Bankers Association. The average 15-year mortgage rate also fell last week, to 3.95% from 4.03%, the lowest contract rate on record, the MBA said. Refinancings accounted for about 78% of all mortgage requests last week. The group's market index rose by 0.6% last week. The refi index rose 0.6% while purchase demand rose for the fourth straight week but by just 0.3%.
mortgageloan-processor.blogspot.com News Update: Home Mortgage Rates Hit New Lows, But Home Purchases, Refinancing Only Inch Higher
Current mortgage rate trends are showing that we should expect higher interest rates in the very near future. The trend in the 10 year treasury rate yield that began back in January remains intact and as strong as ever. If this trend continues, we could see the 30 year fixed mortgage rate over 6% before we know it. Obviously this is very bad news for home owners who were hoping to refinance at low rates.
If you were hoping that the mortgage rate trend would reverse and head down, you might have missed the boat. Overall rates have stayed above 5% for two months now and it looks like 6% is the next target. The three decade downtrend that began back in 1982 looks to be bottoming out in the years from 2002 to 2009. This bottoming process could mean that average mortgage rates could head into the double digits in the next few years.
No one wants this to happen, especially the government, but the government is going to be the exact reason we do see higher mortgage rates.
By forcing rates lower through the purchasing of US debt, the Federal Reserve Bank has devalued our currency. As the US dollar drops in value, the 10 year yield increases which causes overall interest rates to move higher. The Fed continues to shell out billions of dollars to buy up mortgage backed securities. This will help to keep rates low now, but eventually, when the dollar gets devalued even more, we are going to see an inflationary period that includes much higher rates. More Mortgage Rate Trends - Trends Showing Higher Mortgage Interest Rates Issues
