http://seattletimes.nwsource.com/html/businesstechnology/2010965369_apustreasuryborrowing.html
That is the million dollar question and I wish I had a crystal ball. Most everybody (including me) expects mortgage rates to rise once the Fed concludes their $1.25 trillion mortgage shopping spree on March 31st or at some point in the near future.
Estimates vary, but most expect rates to vary by .25% - .75% when the Fed is done purchasing mortgage backed securities and treasuries to keep these rates low. But there is a more optimistic take which speculates that mortgage rates will stay low even without the Fed's direct intervention.
The more optimistic view definitely hinges on the government still playing a huge roll in the mortgage market. If this view is right, then the end to the Fed purchases/spending won't even cause a ripple in interest rates. That would be ideal obviously with homeowner's still trying to lower their interest rate via refinance to go along with first time home buyers trying to take advantage of this tax credit and low interest rates. According to the article in Seattle Times, the Fed is looking to increase their ceiling amount to spend on mortgage backed securities to keep these rates low - we'll see if that gets approved.
All in all, it sounds like the Fed is trying to come up with a way to keep these mortgage rates low (for now). I beleive that the economy will have to be clearly improving before we see to much in the way of higher mortgage rates. I will keep you updated on this subject though.
If you're thinking about refinancing or purchasing a home, now is definitely the time as who knows when these low rates will start the upward trend. Please contact me with any questions. Take care ~
No comments:
Post a Comment