Understanding Mortgage Rates | dripp inc | Home Equity | Refinancing and Remortgage Guide

Good Afternoon,

Continued action in the treasuries are causing a measurable and consistent slide in long term fixed rates.  Since this market movement is not a result of any one event this week, we all have to wonder if it will continue or make a reversal to the trend we’ve seen in the past 2 months.

We are now seeing rates dip back to their September lows, so you may even be able to save money if you already have a favorable rate, especially if you were looking to take cash out or consolidate debt. Fortunately, there is much more that you can control now than 1 month ago.

We are at a period in our housing market where certain areas of the country that were hit the hardest are showing signs of recovery.  Their sharp reduction in home values is beginning to ebb and home sales are starting to appear with the bargains created.  Credit and lending is a bit more stable now with the government bank guarantees being put into place.  Combined with the recent lower interest rates, more people are seeing this as a win/win situation and are making offers on homes that will no doubt appreciate very well on the other side of the housing crisis.

The lower rates this week are also causing people with home improvement plans to finally get a good loan and begin their projects that have been a delayed into the fall.  Just as the snowball effect that lower home values and lost jobs have damaged our prosperous economy, a new and more stable economy is emerging with a kick start in credit availability by our government to restore consumer confidence and re-establish the U.S. as a resilient global leader.

As a homeowner, these lower rates are directly targeted to help you get back on track, so take advantage of these opportunities as they present themselves such as this week. I am always here to help.

Good Afternoon,

It feels as if this crisis will never end. Monday and Tuesday’s bond market has opened up considerably. Rates continue to drop due to economic uncertainty and recession fears in Asian and European Markets.

Monday’s only economic data was September’s Leading Economic Indicators (LEI). This index attempts to measure future economic activity, particularly during the next three to six months. It was expected to show a decline of 0.3% but revealed an increase of 0.3%. This means that the economy may strengthen during the next few months when it was expected to worsen. However, offsetting this news was a downward revision to Augusts’ reading. What was previously announced, as a 0.5% drop in August is now believed to be a 0.9% decline. That revision is helping to offset the surprise jump in this month’s reading.

The primary focus was on Chairman Bernanke’s testimony before the House Budget Committee. He updated the committee on the status of the economic recovery, which included a prediction that the economy would be weak for several quarters. He also encouraged another economic stimulus package that may benefit taxpayers. His words are being taken as favorable to bonds, so look for some improvement as the morning goes on. If another stimulus package is given, it may result in further doom for bond markets.

There is no relevant economic data scheduled for Tuesday or Wednesday. This will likely keep bonds fairly calm unless the stock markets are volatile again. If they are volatile again, expect major reprices from major banks.

Overall, I am expecting to see a fairly good week for mortgage rates, assuming the stock markets are not wild again. The most important day was Monday and major banks showed improvements. However, just because it is a light week in terms of economic news, we should not let our guard down as the markets can implode or rally at anytime these days.

Please give me a call if you would like a quick quote or need help with your home finances.