Economic Conversation

Home mortgage loan rates have been quite steady lately moving between 5.1% and 5.4%.  This is quite unusual when the 10 year treasury rate yield has seen a drastic increase from 3.3% all the way up to 3.7%.  With a move like this, one would think that 30 year fixed mortgage rates would be over 5.5%.  That has not been the case and it will be interesting to see if this disconnect continues as the weeks move forward.

It is highly unlikely that both mortgage rates and the 10 year yield will move in opposite directions.  Eventually one will move in the same direction as the other.  If I had to guess, I would guess that mortgage rates would move higher as the 10 year yield has been a strong uptrend since the beginning of 2009.  This uptrend was almost broken a few weeks ago when the Federal Reserve Bank announced that they were going to buy back huge amounts of US debt, but the uptrend remained intact even after the speech by Bernanke.

With this knowledge, it is a good idea to go ahead and complete the mortgage application you have been hesitant about.  If you wait a few months or even a few days, you could see mortgage rates above 6% which would almost negate the reason to refinance at this point.  Arm yourself with knowledge of the overall mortgage market and make sure to get the low mortgage rate that you desire.