Rates have stabilized over the last three months settling between 4.125% and 4.75% on a 30 yr fixed mortgage*. You can see the stabilization below in the 1 year chart of the 10 yr treasury. During May and June there was an extreme move higher. Yet rates now are almost exactly where they were 3 months ago.
The last 30 years have conditioned us to think that all you have to do is wait for lower rates to come. The question is: “Will that continue into the future or have rates hit their all time low?” One of the tells I’m watching for is a break of the current range. A move below 2.5% on the 10 year treasury would point to much lower rates, while a move over 3% would concern me that rates are going to go much higher. My fundamental belief is that rates will continue to decrease from here as I believe that the Federal Reserve will continue QE and likely increase it. Yet the reason rates went higher back in May and June was because the Federal Reserve announced they were going to slow QE. A slow that was expected back in October but has still yet to materialize. Eventually increased or slowed QE will be the determinant of whether rates go up or down from here.
The average homeowner today needs to contact me about refinancing if:
– they are currently in an adjustable rate mortgage
– have an interest rate higher than 4.75%
– are currently paying mortgage insurance
Please feel free to contact me for a free mortgage consultation.
3 month chart of 10 yr treasury
*These rates are based on $220,000, 80% LTV, 760+ FICO, SFR, Primary Home. Please give us a call to get a quote for your situation. APR 4.21 and 4.91