Economic Conversation

Last week I pointed out that refinance mortgage rates were likely to go higher because the 10 year treasury rate yield had a 10% move to the upside.  At the beginning of this week, we saw a slight pull back in the 10 year yield, but it looks as if support has held and the yield is moving higher.  The 10 year treasury rate yield currently sits at 3.55% with little resistence all the way up to 4%.  If the yield reaches 4% you can be rest assured that mortgage interest rates will get close to 6%.

If you have been waiting for mortgage rates to drop below 5% you might have waited a little too long.  Now that the uptrend of the 10 year yield remains intact, it is likely that the 30 year fixed mortgage rate is not going to fall below 5% anytime in the near future.  It is advisable to go ahead and get that mortgage application in as soon as possible because if you wait a few months or possibly even a few weeks, you could see mortgage rates in excess of 6%.

Before deciding to go through the refinance or first time home buyer process, I would edcuate myself on the current mortgage market.  There is a great article on mortgage rate trends located at Subprime Blogger if you are interested.  They update their mortgage rate trends article every Monday, Wednesday and Friday.