(Originally published October 23, 2010.)
For months now, we’ve enjoyed an environment where mortgage interest rates moved lower and lower, with the occasional sideways movements to be expected when tracking any market-driven commodity. However, since the Federal Reserve initiated their QE2 policy (quantative easing, second round) on November 5th, those relatively passive and friendly interest rates have suddenly become angry and volatile.
For over a week now, we’ve seen a significant rise in interest rates. The gains we realized over the past few months have all but evaporated. Many market analysts, who a week ago were saying, “The Fed’s QE2 policy should keep interest rates low for the foreseeable future,” have reconsidered and now are saying, “We believe the best interest rates are behind us.” Of course, no one knows for sure.
So what does the future hold for mortgage rates?
For now, analysts agree on only one thing: volatility. Anticipate mortgage rates to fluctuate as much as a half percent over the coming weeks. The markets will be looking for direction from everywhere including soon to be released economic indicators, commentary from central banks around the world, upcoming Federal Reserve statements, and of course, anything said by (Federal Reserve Chairman) Ben Bernanke.
Although I don’t see 30 Year Fixed mortgage rates heading into the fives yet, if you’re contemplating buying a home, well folks, it won’t get much better than it is now. And if you’ve been procrastinating about refinancing, then get off your tuchus and call me IMMEDIATELY. Your window of opportunity to get a great rate is quickly blowing shut.
Since 1992, Warren Goldberg has helped thousands of clients own their homes, refinance their mortgages, restructure their debts, and invest in real estate. Warren is known for his wide knowledge of mortgage products and wealth-creation strategies.