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- originally posted October 1, 2013 -
Interest rates are dropping again, which is mostly being driven by a bullish rebound in mortgage bonds.
On September 19th the Fed determined that continuing weaknesses in the economy was sufficient reason to continue its current level of monthly mortgage bond purchases. Prior to that announcement, the markets were anticipating a tapering of those purchases, which has caused interest rates to rise over the last 4 months.
With this pledge by the Fed to continue stimulating the economy, we can anticipate that mortgage interest rates will remain in check until the economic recovery appears more sustainable. Current expectations are that the Fed will pursue this policy directive through the remainder of the year, and likely into 2014.
Heading into October the markets are seeking relief (and security) from the political turmoil in Washington, particularly over the stalemate with the debt ceiling and a potential shutdown of the government. Investors do not like this uncertainty, and they'll continue to pour money into mortgage bonds until things settle down. While this uncertainly continues, mortgage rates should continue to slide. October could prove to be a very unsettling and volatile month for home shoppers seeking a loan. Buyers shouldn't get too "giddy" with rates though, because things could change quickly. If you don't have the stomach for volatility, lock your loan rate.
Till next month,
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 me 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 still quite a bargain!
Michael Dagner is a real estate professional in Denver, Colorado.
The Michael Dagner Group, Brokers Guild Cherry Creek Ltd, 7995 E. Hampden Ave, Ste 100, Denver, CO 80231 Map
5 Minutes From The Denver Tech Center - Near Tamarac Square, 9-Mile Station, & Cherry Creek Reservoir
(303) 514-4000
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