How Long Will Mortgage Rates Stay This Low?

By
Real Estate Agent with The Buyers' Counsel

House on a calculatorAs summer winds down, some home buyers in  Massachusetts are still waiting for the perfect opportunity to pull the trigger on their home purchase.  With higher interest rates looming as a possibility, some mortgage professionals are urging fence-sitting home buyers to make their move. 

Last week, rates for 30-year home loans edged down a bit, staying close to record lows that were seen in the spring.  

According to Freddie Mac, the average 30-year fixed rate mortgage was 5.08 percent which is down from 5.14 percent a week earlier. 15-year fixed rate mortgages fell to 4.54 percent, from 4.58 percent previously. 

Bob Walters, chief economist at Quicken Loans says, "The best time to buy a house or refinance - solely from an interest rate standpoint - is now. All of us who have been in the business for a while know that interest rates rise faster than they fall and they usually rise in a very unexpected time frame.  People could wake up to substantially higher mortgage rates at some point."  

While interest rates are usually tied to the actions of the Federal Reserve, the anticipated inflation rate may be a more accurate indication of where mortgage rates may be heading.  Currently, inflation fears are rising after two years of monetary and fiscal policies that were intended to help our faltering economy.  In particular, two Fed policies that have kept interest rate low are set to expire over the next few months. 

The Federal Reserve's campaign to buy $300 billion in long-term U.S. Treasury securities will be winding down in October, and, its plan to buy up $1.25 trillion in mortgage-backed securities will be expiring at year's end.  Some lenders anticipate that these events could influence the direction of mortgage rates. 

Other factors that may affect your buying power are a couple of Federal programs that have been set up to boost the home market.  They include:

Of course, it is my hope that these programs will be extended into next year, and some in Congress are working on that outcome - but, there is certainly no guaranty that it's going to happen.  

So, right now, there are some very good reasons to get in touch and begin the process of your new home purchase as soon as possible.     

Related Posts:

Massachusetts Housing Market Showing Signs of Recovery

Sales are Up at Luxury Home Builder 

 

Do you have questions about buying a home in the Metrowest area?  I would love to talk with you. Please feel free to call me at 508-881-6230 - any time or E-mail me. 

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Copyright 2009 - Claudette Millette, Broker, Owner, TheBuyersCounsel -  800-392-1446, E-mail    

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Rainmaker
532,544
Robert May
Robert W May - Lethbridge Real Estate - Lethbridge, AB
Real estate consulting

I try to keep an eye on bond rates and spreads.  They have been pretty choppy in 2009 which has made things a bit less stable, but it is a great predictor of future rates.

Sep 07, 2009 09:09 AM #1
Rainmaker
842,617
Barbara Altieri
Kinard Realty Group - RealtyQuest Team, Fairfield and New Haven County CT Real Estate - Shelton, CT
REALTOR-Fairfield County CT Homes/Condos For Sale

Absolutely right that interest rates 'rise faster than they fall'.  The time to by IS now, especially since we don't know what is going to happen with those Fed programs.  The price of procrastination could be very costly for buyers still sitting on the fence.

Sep 07, 2009 09:13 AM #2
Rainmaker
403,659
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Robert:

Thank you for that.  This is more your area than mine and I appreciate your observations.  This is so hard to predict. 

Barbara:

I agree with you, particularly if these programs are not extended and that is a big question mark right now. 

 

 

Sep 07, 2009 10:51 AM #3
Ambassador
1,726,157
Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Claudette...

Low interest rate are always great for both buyers and sellers and real estate in general!

Sep 07, 2009 11:35 AM #4
Rainmaker
403,659
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Richard:

Absolutely.  And, let's hope they stay this way for awhile. 

 

 

Sep 07, 2009 11:41 AM #5
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1,367,318
Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

Like you, I hope we get the extension and the interest rates stay this low. But I dont really want to hear about the extension until mid-November. At least, the looming dateline made many of my on the fence buyers to do something.

Sep 07, 2009 12:26 PM #6
Rainmaker
403,659
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Loreena:

Yes, I know what you mean. Even though I have read about Congress working on the extension, it doesn't seem like they are doing it very quickly.  Perhaps we will all get our wish and they will announce it on November 31.

 

Sep 07, 2009 01:07 PM #7
Rainmaker
545,096
Toula Rosebrock
Diane Turton, Realtors, Forked River, NJ - Lacey Township, NJ
Broker/Sales Associate, Realtor, Lacey Township,

ToulaRosebrock,com

Hi Claudette:

It's just a great time to buy right now!

Interest rates are low and there are a lot of homes to choose from.

Hopefully more buyers will get off the fence and buy now!

Sep 10, 2009 01:07 AM #8
Rainmaker
403,659
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Hi, Toula:

I agree.  There are a lot of reasons, along with low interest rates, to buy a home right now.  I hope more buyers get this message and take advantage of the situation.   

Sep 10, 2009 02:18 AM #9
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Rainmaker
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Claudette Millette

Buyer, Broker - Metrowest Mass
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