Mortgage Interest Rate Trends

Mortgage Interest Rate Trends

Mortgage interest rates are ever changing due to the status of the economy.  There are several other factors that effect interest rates related to mortgages.  To understand what effects an interest rate is to understand why it is consistently fluctuating. 

What effects a mortgage interest rate? 

There are several factors can that influence a change in rate.  First there are bonds.  The general term bond in this case relates to mortgage backed securities.  It is a simple formula in that when a bond sells for less, the interest rates will increase.  When a bond sells for more, interest rates will then decrease.  As we are currently in a state of flux with our economic status, rates are changing from week to week. 

Why are mortgage interest rates continually unstable?  Even due to changes in mortgage backed securities, emotions are truly the most swaying factor in interest rate determinations.  Individuals who may read about stocks, employment/unemployment data, and economic information are effected by this news.  Even hearing about a mass set of purchases within a certain state or county can influence others to consider the purchase of a home.  People effect people.  A trend, is just that, a trend.  This is why interest rates can not only change from week to week, but also from day to day, and even hourly.

In this, supply and demand becomes an issue that also effects interest rates for mortgages.  In a location such as Milwaukee, Wisconsin, where there are often several homes for sale on a consistent basis, there may not be as much of a demand for a home purchase as say in Sedona, Arizona.

The availability of homes for sale in beautiful Sedona, Arizona are few and far between, increasing the want and overall demand for real estate in the area.

Additional factors such as growth in GDP (gross domestic product), inflation and prices of oil can also make slight changes to interest rates affecting mortgages. 

As of today, there has been a drop in interest rates. This has encouraged those looking to purchase a home to act quickly.  It is also encouraging those who were looking to sell their home, to make pricing adjustments, and/or get their property on the market. 

It is always in a buyer or seller’s best interest to be informed, but to also be prepared for interest rates to drop so they can make their move.  By getting pre-approved for a home loan, one can then watch interest rate trends, and purchase when the time is right.  Additionally, finding an informative realtor to aid in your purchase or sale can also prove to be a good decision.
Mortgage Rate Trends – Trends Showing Higher Mortgage Interest Rates

Mortgage interest rates are ever changing due to the status of the economy.  There are several other factors that effect interest rates related to mortgages.  To understand what effects an interest rate is to understand why it is consistently fluctuating. 

What effects a mortgage interest rate? 

There are several factors can that influence a change in rate.  First there are bonds.  The general term bond in this case relates to mortgage backed securities.  It is a simple formula in that when a bond sells for less, the interest rates will increase.  When a bond sells for more, interest rates will then decrease.  As we are currently in a state of flux with our economic status, rates are changing from week to week. 

Why are mortgage interest rates continually unstable?  Even due to changes in mortgage backed securities, emotions are truly the most swaying factor in interest rate determinations.  Individuals who may read about stocks, employment/unemployment data, and economic information are effected by this news.  Even hearing about a mass set of purchases within a certain state or county can influence others to consider the purchase of a home.  People effect people.  A trend, is just that, a trend.  This is why interest rates can not only change from week to week, but also from day to day, and even hourly.

In this, supply and demand becomes an issue that also effects interest rates for mortgages.  In a location such as Milwaukee, Wisconsin, where there are often several homes for sale on a consistent basis, there may not be as much of a demand for a home purchase as say in Sedona, Arizona.

The availability of homes for sale in beautiful Sedona, Arizona are few and far between, increasing the want and overall demand for real estate in the area.

Additional factors such as growth in GDP (gross domestic product), inflation and prices of oil can also make slight changes to interest rates affecting mortgages. 

As of today, there has been a drop in interest rates. This has encouraged those looking to purchase a home to act quickly.  It is also encouraging those who were looking to sell their home, to make pricing adjustments, and/or get their property on the market. 

It is always in a buyer or seller’s best interest to be informed, but to also be prepared for interest rates to drop so they can make their move.  By getting pre-approved for a home loan, one can then watch interest rate trends, and purchase when the time is right.  Additionally, finding an informative realtor to aid in your purchase or sale can also prove to be a good decision.

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.

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