Financing in Tomball>Question Details

Carl Hohl, Real Estate Pro in Houston, TX

What opinions are out there about mortgage interest rates? Will they go up? When do you think they will? Or do you think they will stay flat?

Asked by Carl Hohl, Houston, TX Wed Jun 23, 2010

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Mortgage rates that all depends on one thing:

Will investors demand more when buying government bonds?

If they insist on higher interest rates to buy government bonds mortgage rates will also rise.

The federal reserve today said they will keep rates at 0 to 0.25% for the forseeable future. However, they can not control the bond market. That could change much higher much quicker and mortgage rates would mirror that. Will it happen? Who knows...
0 votes Thank Flag Link Wed Jun 23, 2010
It's hard to say. Everybody has an opinion. I think they will stay low through the end of the year but again, it's anybodies guess. Things happen fast and if the Fed decides to tighten rates will jump up. Of course by jump up I mean in the low 5% range. With my best interest rates currently at 4.25% that definitely is a big difference but historically speaking it is still very low. Rates today are pretty much the lowest they have been in over 40 years. Let's hope they can stay there for a while at least until the economy gains some more momentum.
0 votes Thank Flag Link Wed Jun 23, 2010
I think we are in a period of gently fluctuating rates. There has to be a major resurgance in the economy before you are going to see any move from the Federal Reserve to push rates higher. Even the bond market which anticipates the Feds moves is saying that we are going to see relatively stable rates for at least the rest of 2010, maybe longer. Of course, in this day and age there can always be a major event that changes everything so......
0 votes Thank Flag Link Wed Jun 23, 2010
They will stay flat until the fed starts to increase the fed funds rate. In doing so, it will cause the carry trade effect to be squeezed and institutional investors will start to require a higher return on investment from MBS. I did a short video (a few months ago) that explains the carry trade and why/how it is effecting current mortgage rates.…
0 votes Thank Flag Link Wed Jun 23, 2010
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