Thursday, October 27, 2016

Mortgages Rates Uncertainty Remain HIGH

Hello again from Rockland Financial...

Rates have been edging higher recently, nothing drastic but they seem to be trending that way.

Interest rates didn't move much today, with most lenders just a bit higher than yesterday.  This actually keeps us in line with the highest levels in over 4 months.  However, for the sake of perspective, rates have almost never been as LOW as they are today.  The average lender is quoting conventional 30yr fixed rates of 3.625% on top tier borrowers, with a few at around 3.5%.

Bond markets that affect rate movement find themselves generally defensive and uncertain. Investors are anxious to see if next week's Fed announcement will hold clues about the Fed's intention to hike rates in early December.  Although the Federal Funds Rate doesn't directly affect mortgage rates, if investors think the Fed will hike in the near future, mortgage rates tend to move higher in the present. A bit of a knee jerk effect so to speak

That's one of the key reasons that rates have been seeing an uptick over the past few months.  The other major concern is that of the Fed's largest counterpart, the European Central Bank (ECB). Investors are anxious to find out if the ECB plans to begin reducing the amount of bonds it's buying each month.  This bond buying is a driving force and contributes largely to low rates around the world.  There are obviously rumors floating around on both sides of this debate, but we won't know anything for sure until early December we should hear ECB's thoughts.

There's a massive amount of uncertainty between the ECB and Fed, and this can't possibly be cleared up for more than a month. As far as strategy is concerned regadring mortgage rates, it makes more sense to be defensive (as in favoring locking vs floating) until at least and unless rates can stage a big enough comeback to call the recent uptrend into question.

And now the broken record part. Rates are still historically low and there are many reasons to take advantage and refinance, below are just a few.

If you are in the market to purchase, getting pre-approved is paramount.

Contact us to help you with any Real Estate need you have. (Rockland Financial is also now representing buyers and sellers with finding the perfect home or listing your property to get the highest price available)