Are Mortgage Rates Going Up?
The big question every potential home buyer asks is what is
the trajectory of interest rates? Depending on who you ask, you can get very different answers.
30 year fixed mortgage rates have been climbing steadily in 2008. Dips have been seen here and
there, but for the most part, it has slowly gone up. It was roughly 6.3 in July of 2007 and is now
in the area of 6.3 in July of 2008. In that year it dropped close to 5.25 and steadily returned
to a similar rate as it began. So what does this mean if you are buying a home this summer?
Watching the mortgage rates on a daily basis feels like playing roulette in Las Vegas. If you
lock in at a certain rate and the mortgage rate goes down, you can't change your mind and lock in
again. It's a gamble. It means you should educate yourself on what stimulates the interest rates and watch those reports closely.
What should you watch? Because mortgage rates are determined by investors buying and selling loans,
it can be dictated by the fears and concerns of those investors. If the investors are nervous about
the economy and start selling home loans, then the mortgage rate will change. If news reports come
out with certain information that cause people to take action and refinance or make an offer on a house,
that affects the interest rates as well. By the time people hear the information and react to it, the interest rate has already risen.
Rather than using the media for interest rate information, it is best to hit the keyboard and start
researching the internet or calling a reputable banking professional to confirm your findings. Watching
the unemployment data is also a good indicator of mortgage rate trends. High unemployment and recession cause interest rates to go down.
Recently, it was reported that unemployment rates were much higher than anticipated. In theory, the
rates should be dropping in the next couple of months. According to the expert analysts' reports for
the first week of July, 21% believe interest rates will go up, 43% believe it will go down, and 36% believe it will remain the same.
Rate drops make sense in the grand scheme, considering that when people have less money, the interest
rates drop to encourage them to borrow money. This does seem a bit backwards however since unemployed
people have a difficult time paying back the money they borrow. They are a high risk. High risk
borrowers drive the interest rates up. But debt seems to be the American way, whether you have money or not.
Are Mortgage Rates Going Up?
What Causes Mortgage Rates to Go Up?
How Fed Rate Cuts and Increase Affect Mortgage Rates
Do mortgage interest rates drive the Housing Market?