Dec 01, 2012

The federal reserve continues to buy mortgage bonds on a routine monthly basis, which keeps bond prices heading up. Due to the inverse relationship between bond prices and interest rates, interest rates tend to fall when bond prices rise. Even though the Fed will continue to buy bonds for the forseeable future, it is not expected that rates will drop any more than slightly.

One thing to watch during December are possible swings in interest rates due to the intense debate in Washington over the "fiscal cliff" negotiations. Some experts predict that once an agreement is reached, their will be pressure on bond prices to fall, and interest rates to rise. Other recent economic factors that have kept interest rates low and improving, are that both "GDP" and jobless claims have improved. Home sales improved five times what was expected.

 

Stay tuned for my next report.  (posted December 1, 2012)

Rates As Of December 1, 2012

 

6 month trends graph

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Rate Advice

Although there's a lot of reasons for interest rates to remain stable throughout this calendar year, the long term expectation is for interest rates to rise. Don't take these low rates for granted. If you're financing a home right now, my best advice is to "lock-in" these low rates, rather than gamble that they'll be lower as you get closer to your closing date. Better be safe, than sorry!

If you're in the market for a home this year, allow us to help you find the right lender and loan program, and help you take advantage of these great low interest rates. Today’s interest rates are quite a bargain!

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