As I have said before, I don’t normally quote mortgage rates for a number of reasons, but I am going to make an exception again today. Today’s 30 year fixed rate for a conventional loan for the Eugene/Springfield, Lane County Oregon market is at 4.875%/5.041% APR*. The reason I am doing this is because I think this rate will be going up shortly. How soon is a really good guess, but undoubtedly by the end of March, but I expect it to happen much sooner.
Why do I expect movement sooner, rather than later? Well, I think we are seeing inflation that isn’t showing up on the government reports. I think the continued climbing of the stock markets while gold and oil climb are good indications of inflation. I think that the growth of the federal government through the stimulus spending is a sure sign of inflation and today we got actual reports of inflation in the United Kingdom and India. If you don’t think we are affected by inflation in other countries, try again. Inflation means that rates will rise. Not may rise, will rise. The Fed has done a pretty good job of keeping inflation in check, but there are signs that we are getting closer.
That is why I am quoting rates today. I think we may see the bottom of the current cycle and if you are one of those waiting for the bottom, you missed it, but still have a chance to get pretty close. Rates are pretty volatile in the best of times and in this market, a sudden sell off could result in huge increases in rates in a short period of time. I don’t think that will happen, I think rates will stay fairly good, but no where near as good as right now. I think we will see them go up much quicker than they come down but not in big leaps. I think this video from NAR really points out the folly of continuing to wait:
(*Now, for the fine print, the rate above assumes the following: Owner occupied conventional loan with a $250,000 purchase price (non manufactured home, non rural acreage, single family home) with 20% down. Loan amount is $200,000 Credit score of 740 or higher. 30 day lock period. Credit score, loan size, down payment, and purpose of loan will affect APR. This is not a guarantee of rate availability for a specific property and can change without notice. My lending is restricted to Oregon, Washington and California.)
The Federal Reserve is still buying mortgage backed securities and that is helping the bond market. This purchase program is only scheduled to continue through the end of March. Rates will undoubtedly bounce up when the Fed stops buying bonds. Now is probably the best of all worlds with rates down and housing prices down and sellers willing to negotiate, but for who knows how long? Add to that the First Time Home Buyer Tax Credit and the “Move-up” Homebuyer Tax Credit and we have an unbelievable time to buy. Both of those credits require you to be in contract by the end of April.
If you would like more information about what you can qualify for and actually be comfortable paying on a mortgage, give me (Fred Chamberlin) a call today, 541-342-7576/541-221-3455 cell or e-mail me. I am here to help you and to answer your questions. Alpine Mortgage Planning is located at 1200 Executive Pkwy., Ste. 100, Eugene OR 97401.