Up from the lowest level it’s been since 1971, 30 year fixed-rate mortgage rates are at 4.21 percent. Previously, the rate was 4.19. Five and 15 year fixed mortgages have also risen slightly.
This slight upward turn is encouraging. Mortgage rates can gauge the housing market, and we are all hoping for a stronger housing market. Mortgage rates have been declining since April. According to AZcentral.com, mortgage rates track Treasury bond yields, and there has been a great deal of financial activity lately that has lowered the demand and the value of Treasury bonds. There has been speculation that the Reserve will buy these back soon in an attempt to stimulate the economy. This is an important point to note, because if the investors buying these bonds are correct, then when the Reserve begins buying the bonds back, the demand and value of the bonds will increase, thus driving a stake into mortgage rates.
Although there are still many dissenting voices, it seems very likely that the housing market has either just barely begun to switch directions, or it is very near doing so. If you have been considering buying, you don’t have much time until we will see an increase in home values, asking prices and mortgage rates.
Because mortgage rates are so low, many people are choosing now to refinance their mortgage. In many cases, refinancing can make a huge difference in a family’s budget. There will be many cases where people were able to refinance before defaulting on inflated payments, nearly avoiding foreclosure. If people are able to avoid foreclosure, the banks are receiving payment and can function like we need them to and loan money to the people hoping to buy. That’s all very idealistic: it won’t be as easy as that, it won’t be as quickly as that, and it won’t be as neat as that. But it is a hopeful thing to consider.
