Mortgage Rates Finally Rise

Last week things finally started looking up for the US economy. Investors have started becoming less pessimistic about the debt crisis in Europe, and it seems that confidence in the market is regaining. This led to the rise of mortgage rates this week, and hopefully for the sake of the economy, the trend will keep going up.

Mortgage Rates Last Week

The benchmark 30 year fixed mortgage rose as high as 16 basis points last week, going up to 4.37%. Although this is a sharp rise and has been the best improvement for about 2 months, this rate still registers among the historic lows.

The benchmark 15 year fixed mortgage also followed suit with the rise, gaining 13 basis points to 3.59 percent. The 5/1 adjustable mortgage rate also rose 15 basis points to 3.26 percent, and jumbo 30 year fixed rates went up to 4.9 percent or 8 basis points.

Again, the 30 year fixed mortgage rise is the highest we’ve seen since August 31st when the rate was also at 4.37 percent. But this still falls short since one year ago, the rate was at 4.47 percent.

Mortgage Rate Predictions This Week

Despite the sharp spike of mortgage rates last week, only 27% of financial analysts predict that the rates will continue to go up. Their reason for the continued rise is the growing loan demand and the hope of improvement of the economic situation in Europe. However, 55% of analysts say that the rates will be going down because despite the hope that Europe will find a solution to their debt problem, there is still no concrete plan or evidence to back up this claim.

What This Means for Refinancers

Despite the sudden climb of interest rates for mortgages, many analysts say that the rates are unlikely to rise during the next few weeks. For those who are looking to refinance their home and who are still in the process of applying, analysts are saying that there’s no need to lose sleep over the potential rise of rates next week. However, this smorgasbord of low rates have been dangling in our faces for more than two months now, and despite the majority vote that rates will not go any higher, it is best to lock in that rate while it is still in historic lows. Even in the stock market, nobody can really predict when rates will hit rock bottom, so the best thing to do is be satisfied with the fact that the rate you lock in now has been one of the lowest in the past 50 years.


Mortgage Rates Prediction for Sept 29-Oct 5 2011

Mortgage rates have continued to fall since August and September, and the world is left wondering when the economy will pick up again. With the start of a new month, it seems that the economy is in a position to fight back. Although analysts are not united in their view that mortgage rates will go up this week, majority of them believe it is time for the rates to go up. Views are divided into three, 40% of analysts say that mortgage rates will go up, 27% say that it will continue to go down, while 33% say that the rates will remain the same. Below are the discussions for each view.

Mortgage Rates Going Up

There are different reasons why analysts predict that rates are bound to go up this week. First of all, Europe and Greece are dominating the markets and the European debt and market crisis is showing signs of positive movement. Since investors are currently focused on Europe, their growth is dictating the market. Another thing is the Mortgage Bankers Association index revealed a 9.3 percent growth as many borrowers refinanced due to the past week’s rates decrease. Rates are predicted to go up by 0.125%. However, these same analysts also say that although they predict rates will go up, the bounce will be small and the improvement in Europe will not be permanent, meaning the rates will eventually go down again but just not this week.

Mortgage Rates Going Down

Analysts that support the notion that rates are going down are giving the reason that the European situation is not stable and that investors are bound to realize that. With the volatility of the market, the slight increase of rates last week is considered to be a “false hope”, and that rates will continue to dip.

Mortgage Rates Remain Unchanged

Last week was a show of volatility and despite the spikes and lows, we are back to where we once were. Changes in rates are in such narrow ranges that any upward or downward movement are bound to neutralize one another. One analyst says that the only way for the market to improve is to offer more jobs to the American people. No matter how profitable banks will be or how much cash they have, until the job market shows some signs of growth, rates will not go up.

Last week’s prediction went in favor to those who bet that rates will go up. This is only 14%, as compared to the 70% who believed that rates will go down. In the end, no one can really predict the market and the wise investors will probably just stick to their original plan, not being swayed by news of volatility.