Are interest rates going to go up?

Asked by Laura Green, Los Angeles, CA Wed Nov 9, 2011

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Robert Chome…, , San Diego, CA
Thu Nov 10, 2011
The honest answer is no one really knows, no one. Even the best bond market analysts in the world get it wrong most of the time. Mortgage rates depend on many global macroeconomic events. If there is continued bad economic news around the world and in the U.S., they could get better. If the economic news improves they could move up.
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, ,
Thu Nov 10, 2011
The cost of a loan has gone up about a half a point over the last week or so. But rates are lower than two weeks ago.
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Wes Black, Agent, Louisville, KY
Thu Nov 10, 2011
Very good possibility that rates will continue to edge downward for the next few months with geo political climate issues. Noticed today that interest rates have dropped under 4%.
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Lazaro Lopez, Agent, miami, FL
Thu Nov 10, 2011
Daily Economic Update: Mortgage Rates and Inflation
Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights mortgage rates and inflation.

â– The yield on the 10-year Treasury closed Friday at 3.43%, 16 bps lower than the previous week. The decrease in the Treasury rate was mostly attributable to a smaller than expected increase in the core consumer price index which increased by 0.1% in March from February. Analysts had expected a 0.2% monthly increase. Although prices excluding food and energy increased very modestly in March, the overall CPI increased by 0.5% in March and by 2.7% from March 2010.
â– The average annual inflation expectation in the U.S. over the next ten years remained relatively unchanged at 2.61%.
■The 30 year fixed mortgage rate closed Friday at 4.95%, 6 bps below the previous Friday’s close.
â– Stronger inflation will put upward pressure on long term interest rates to increase. NAR is forecasting interest rates to increase to 5.6% by the end of 2011. The cost of financing a $170,000 home purchase with a 20% down-payment over 30 years would increase by approximately $600/year with a 60 bps increase in the mortgage rate.
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Phoenix Buyer, Home Buyer, Phoenix, AZ
Thu Nov 10, 2011
No. The federal reserve is destroying this country by printing endless currency in an attempt to inflate the housing market. Housing is still deflating, I don't care what any one says, it is still in deflation mode. The federal reserve announced "operation twist" a few months ago. What this is is the federal reserve selling the short duration treasuries to buy the long dated treasuries. This will depress long dated notes. This WILL continue to depress interest rates, which is the entire attempt. Their logic is if they depress interest rates on long dated yield that will incite mortgage rates to continue to fall to levels beyond comprehension, and thus lower the deflationary housing market. They announced interest rates will remain compressed until at least 2013 (AT THE EARLIEST).

What this tells you is the housing market is no where near finished compressing. Regardless what inventory levels, etc tell you when over 6 million homeowners are underwater the housing market has a lot of room to further depress. Yet, they are trying to entice more people to enter the market by continuing to lower and/or maintain low interest rates. If someone is considering buying because he/she is afraid they may miss the low interest rates, they simply are incorrect, low interest rates will be around for at minimum a few more years.

I do investment banking, I follow this stuff frequently. Don't buy the blather that you better buy now or you may miss that rock bottom interest rate, that is nothing more than drivel. They have years to get a record low interest rate as spoken directly from the mouth of the head of the federal reserve himself, Ben Bernanke.
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BG, Home Buyer, Phoenix, AZ
Thu Nov 10, 2011
they have to dig a hole to go down any lower :)
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Mack McCoy, Agent, Seattle, WA
Thu Nov 10, 2011
Yes, they are. Absolutely without question.
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