Economic Conversation

Fixed year mortgage rates have been between 5% and 5.5% for the last several weeks; that is likely to change.  With the 10 year treasury rate yield moving from 3.3% to 3.7% you are likely to see average mortgage rates move above 5.5% in the very near future.  It is surprising that there has been such a disconnect over the last few weeks, but the correlation seems to always bring the 30 year fixed rate mortgage and 10 year yield back together.

The uptrend in the 10 year yield has been strong since the beginning of the year and it looks as if the yield is going to test the upper trendline very soon.  If this is the case, we are likely to the the 10 year yield reach 4% or exceed it.  If this is the case, we are likely to see mortgage rates get close to 6% if not exceed them.  This is very bad news for those who have waited to refinance or get that first mortgage.

If you have been waiting for 5% or lower mortgage rates, it is advisable to get your mortgage application in now and lock in at a rate lower than 5.5% because it is highly unlikely that we are going to see rates under 5% anytime soon.  There are ads all over the internet and television that offer an 800 number for you to call and ask questions.  Make sure to educate yourself on the subject before you make any big financial decisions though.