In just under three weeks since the end of November, the 10-year treasury yield has increased to 3.56% from 3.21%. All indications point to the 10-year treasury yield continuing to increase, so significantly higher mortgage rates are looming on the horizon. Regardless of this recent increase, current mortgage rates remain extraordinarily low. Analysts believe mortgage rates have already bottomed out. Therefore, waiting any longer to purchase or refinance will only yield - no pun intended - a higher mortgage rate.
Today, borrowers can still benefit from a mortgage rate of 4.99%, or even 4.875, without paying any points, on a 30-year fixed-rate mortgage. Prior to 2009, mortgage rates on the same product in the high 5% range were not uncommon. By submitting a mortgage application today, existing homeowners can take advantage of exceptionally low current mortgage rates on a refinance before mortgage rates head north more in line with 6%. Additionally, prospective borrowers can lock in a low current mortgage rate while benefiting from the federal government's $8,000 first-time homebuyer tax credit.
If rates are to come down again, it likely won't happen before January 2010, if at all. In an effort to keep mortgage rates stable, however, the Federal Reserve will likely make a statement are the beginning of the New Year to push the 10-year treasury yield lower. The government has taken unprecedented steps to keep current mortgage rates low, so it is anticipated they will do more of the same until the economy as a whole has stabilized.
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