Follow the Bouncing Rates
If you have been following mortgage rates over the last couple of weeks, you witnessed mortgage rates reaching their lowest point in history on September 22nd. The 30 year fixed at that time went below 4%! Then, almost as soon as rates hit the bottom, they went up. On September 30th, mortgage rates dropped again back to the previous week’s low. But, just like a rubber ball on pavement, mortgage rates popped back up yesterday. Once again I found myself calling several clients who decided to wait it out just a little longer to see if rates might get a little better. When I informed them that rates have risen, they seemed surprised and especially dissapointed. What was most frustrating is that every one of these clients missed out on thousands of dollars in savings. Ouch! A tough lesson!
One thing to remember about today’s low mortgage rates is they are artificially low due to the actions of the Fed pumping billions of dollars in to mortgage backed securities. However, this action does not produce certainty that rates will remain low. The market still reacts to other economic factors other than the Fed. A good example of this is the financial crisis looming in Europe. It seems every day the U.S. markets react to news coming out of Europe. As a result, this creates one of the most volatile environments for the markets, including mortgage backed securities.
No one is really certain how long rates will remain this low. Some say it is simply not sustainable. I guess time will tell. One thing for sure is that rates are currently at historic lows. Locking in at these lows is a prudent course of action… Especially if today’s rates can put you in a significantly better financial position. Not locking can be frustrating, especially when thousands of dollars in savings is left on the table!
Home prices are down, mortgage rates are LOW! Even if they go up a little, they are still historically LOW! There has never been a better time in history to purchase or refinance an existing mortgage!
