Interest Rates | 02038 Real Estate

Experts wrong as mortgage rates stay low

Warren Reynolds — Sat, 15 May 2010 07:15:42 +0000

Back at the start of the year, there was widespread alarm in the media that mortgage interest rates were poised to rise steeply in early 2010. Despite the dire predictions from many financial experts, rates today remain near record lows.

Don’t rely on the experts for your near-term plans

That goes to show that it’s risky to base your near-term decision-making solely on the forecasts of experts.

There are a lot of smart people working in the world of finance and investing. But as we’ve seen so recently with the world-wide financial crises, they’re only human and people make mistakes.

No one knows for sure what interest rates will do

Here’s just one example of the foreboding interest rate prognostications being made by respected money experts early this year:

And here’s what rates actually have done so far in 2010:

Volatility in a very narrow range

In reality you could say that the alarmist financial prognosticators got it somewhat right: 30 year fixed mortgage rates in the US as tracked by Freddie Mac did rise from roughly 4.9% in February 2010 to about 5.2% in early April.

But a 30 basis point rise is not exactly a steep, devastating jump.

Mortgage rates near record lows

And after that, 30 year mortgage rates fell right back to roughly 4.9%.

So in mid-May we have interest rate status quo so far this year: mortgage rates have jumped around a bit in 2010, but only in a narrow range.

Today, mortgage rates remain at near-record lows . . . right where they were at the start of the year.

No one knows the future

For your long-term investment and financial plans, it’s smart to rely on expert advice.

There are wonderful books and plenty of reliable resources on money and investing that will serve you well in the long run.

Just don’t listen to the pundits on the morning news and on blog posts who make frightening predictions about the near-term direction of interest rates and the markets. They may mean well, but they’re often proved wrong by what really ends up happening!

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30 Year Mortgage Rates Drop

Warren Reynolds — Sat, 11 Jul 2009 13:54:52 +0000

After peaking at nearly 5.6% on June 11, the average 30 year fixed mortgage rate as tracked by Freddie Mac dropped to 5.2% in the succeeding 4 weeks. This 7% drop in rates roughly coincided with weakness in US stock values and world oil prices over the same general time period.

Mortgage interest rates appear primed for continued volatility this summer as businesses, financial experts and investors alike grope for a reliable sense of where the economy may be headed as the Obama stimulus plan begins to take effect.

The recent mortgage rate decline does make home purchases and mortgage refinancing a bit more attractive.

Residential real estate prices in Greater Boston have risen slightly while activity has picked up in the Franklin, Massachusetts region over the past few months.

REOs (post-foreclosure homes) in many regions of Massachusetts appear to be selling more quickly, so now may be an advantageous time for investors to grab a real estate bargain.

Click here to view homes and investment properties for sale in the Greater Franklin/Route 495 region of Massachusetts.

The post 30 Year Mortgage Rates Drop first appeared on 02038 Real Estate.

Rates Rise As Economy Improves

Warren Reynolds — Sun, 14 Jun 2009 16:08:25 +0000

Interest rates generally fall when the economy falters and rise when economic expectations turn bullish.

With retail sales rising, the Fed announcing that the worst of recession may be past, and U.S. consumer confidence reaching a nine-month high in June, is it any wonder that mortgage interest rates rose over the last 2 weeks?

And the recent good news certainly caused a spike in rates!

The average 30 year fixed rate mortgage jumped to 5.59% by the middle of June 2009 according to Freddie Mac. This amounted to a 16% increase in the average interest rate for 30 year fixed rate mortgages in just over 2 weeks (from the 4.82% average rate recorded back on May 28).

But I think we’d all accept higher rates in return for better economic prospects (it’s been over 3 months since we last heard serious talk of the dawning of a new economic depression).

Rates Remain Attractive

Today’s higher mortgage rates can easily be put into context by taking a longer view of interest rates; looking back several years, you can see how low mortgage rates still are.

When viewed in context, you can see that rates are still very low.

Average rates for 30 year fixed rate mortgages were above 6% from the summer of 2005 until the fall of 2008. So at roughly 5.6%, today’s 30 year fixed rate mortgages are very attractive!

Explore Your Options

If you’d like to speak with an expert mortgage advisor, please ask me for a referral – I work with some of the best mortgage providers in Massachusetts!

Click here to see 1000s of homes for sale in the Route 495 region and click here if you’d like to get a Home Value Report on your home or investment property!

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