Mortgage Interest Rates: Update, March 2010

Filed Under Buyers, Mortgage Matters, Sellers, Sellers & Buyers | Comments Off

Years from now, we will all look back at this time in history and say, “Remember when mortgage interest rates were below 6%?”. And I said it, yes ‘below 6%’. The luxury of thinking that 6% is a high interest rate will be gone soon enough. And believe me, I wish this party could last forever. But there’s specific reasons the rate has been so low and if you haven’t read about those reasons, click here.

Unfortunately, it’s coming time for the federal government to make some tough choices. Those choices include pulling out of the Mortgage Backed Securities (MBS) market as planned.

With this pull out, there are multiple repurcussions. In order to better understand what happened just yesterday to the market and what’s going to happen, check out Morgage News Daily’s article about the mortgage interest rates.

Without getting too technical, please keep in mind that demand for something will keep prices high. When demand falls for something – the value of that something must go down in price. This is basic economics.

In order to assist you in reading that article at Mortgage News Daily, skipping to the bottom and reading the last paragraphs will put things in perspective. Now without having to understand the dynamics, all you need to know, as a home buyer or seller, is that when Treasury yields go up and bond selling increases, this causes mortgage interest rates to rise.

We’ll have to take a wait and see approach (as always) but it just seems like this recession and this “looming” feeling of the unknown has been going on for so long. That’s just my opinion. One thing is for sure, if you’re a home buyer (and I feel redundant in saying this), the mortgage interest rates are low now…don’t wait anymore!

Call me and lets get started on an aggressive home search campaign – 631-831-9048.