Interest Rate Update

It is hard to keep up with interest rates even for me and I am in the business.  Interest rates can change multiple times a day in this volatile environment.  As I am sure you have seen or heard, interest rates are at historic lows.  Every Thursday Freddie Mac releases their average fixed rate for the week ending.  What many seem to miss, or they have selective reading, is that it is the AVERAGE for the week ENDING. 

The bottom line is that rates are low and there is no telling how long they will stay this low.  In the release of the FOMC minutes last week there was a lot of discussion whether or not the Fed will increase their purchases of mortgage-backed securities which is set to end at the end of the 1^st quarter of 2008.  Don’t believe everything you read, work with someone who understands what moves rates and watches it on a daily basis, don’t be greedy and get your rate locked in, and never look back. 

”While rates have been low for most of the year—particularly since falling below 5% in September for the second time this year—one big question looming is what happens to those rates once the Federal Reserve slows, and ultimately stops, its debt purchases from Fannie Mae and Freddie Mac.  At a congressional hearing on Tuesday, MBA Chief Economist Jay Brinkmann said that the “most benign estimates are for increases in the range of 20 to 30 basis points” but that some estimates of potential increases “are several times those amounts.”

http://blogs.wsj.com/developments/2009/10/21/mortgage-rates-rise-slightly-some-see-big-jumps-coming/