Economic Conversation

Current refinance rates could be moving higher over the next few weeks due to the increase in the 10 year treasury rate yield.  Over the last month the yield has come off its highs near 4% but we have seen a recent bounce.  The bounce started Monday when the 10 year yield got news that the economic recovery is slower than expected.  President Obama announced that he thought unemployment was going to go above 10%.  Yesterday that trend continued when the Fed made an announcement that was very similar.  If these comments continue to be made, you can expected average mortgage rates to increase.

If current refinance rates do start to increase, how high will they go?  That is a question that really no one can answer with a definite response.  If the 10 year treasury rate yield does in fact reach 4% again, it looks like mortgage rates could get very close to 6%.  The current resistance level on the 10 year yield is around 4% and if that is broken, we could see mortgage rates in excess of 6%.

Right now is a great time to refinance a home at mortgage rates that are still extremely low.  If you have been considering a refinance, now might be the appropriate time.  If you wait a few months, you could see mortgage rates above 6% and then a refinance would be out of the question.  The government has done everything they can to cap mortgage rates yet they continue to rise so this may be a bad sign for the downside of overall mortgage rates.