Latest Interest Rate Reports Show Signs of Instability
The reports are in for interest rates last week and I, for one, am a bit concerned. Typically, interest rates move around a few points at a time. Lately, however, some larger swings in rates have caused a few alarm bells to go off.
A Few Facts about Interest Rates Lately
- The last two weeks have seen larger swings in interest rates on all mortgage types than at any time in the last 3 months.
- Rates have not been this low for over 50 years.
- The government has announced plans to add stimulus to the mortgage market by buying Treasury notes.
- New mortgage rules imposed by lenders make refinancing harder than ever despite ultra-low rates.
If you add up all these facts about interest rates, you can see that the market is far from stable. The truth is that mortgages today are in trouble. With so few consumers able to qualify for home loans and so many unable to take advantage of rates, it is likely that the slumping of home values and interest rates is going to continue.
Looking into 2011…
I recommend homeowners batten down the hatches and prepare for an eventful winter. Even if you don’t refinance during this period, changes in your home’s value as well as your neighborhood could have some serious implications for you and your home. Staying on top of these changes as a homeowner is going to become increasingly important as the instability goes on.