Good morning, America: the mortgage rate as of the 11th of September hit a low of 3.125 percent for a 30-year fixed mortgage; down from last week. The 15-year fixed mortgage, which on the average remained unchanged in the past week, dipped to as low as 2.75 percent this week. However, with experts worried about inflation, 2013 may see rates go up.
Mortgage rates dictate trends in the real estate industry. When rates are higher, it’s more expensive to buy a house so that tends to reduce the number of sales. When it’s down, the opposite is true. There’s no telling how the rates will appear tomorrow or in the next few days, even with expert analysis. Express home buyers in Springfield VA and in neighboring Maryland and DC should learn about factors that can affect the numbers.
Treasury Bills (T-bills)
It’s widely recognized that one of the best indicators for the rise and fall of mortgage rates is the 10-year treasury yield. However, some mortgage specialists dispute this, claiming that mortgage rates aren’t based on how well 10-year T-bills perform. They say that mortgage rates can only be based on mortgage bonds (it’s typical that when bond rates are up, interest rates are also up), and that it’s best to avoid mortgage brokers who keep track of the wrong rate indicators.
Inflation is described as the overall rise in costs as the economy grows. When the threat of inflation looms, mortgage interest rates tend to be high. On the contrary, when there is little to no risk of inflation, the interest rates are likely to stay down.
Other Economic Factors
Employment statistics, particularly those related to unemployment rates, are also contributing factors to the rise or fall of mortgage rates. High unemployment is typically associated with lower inflation, thus pushing mortgage rates down. It also appears that consumer expectations play a role in this, with rates more likely to drop if people actually think they will. Overall, you just have to make a quick assessment of the economy to get a clue: with the correlation being that the healthier the national economy is, the higher mortgage rates would be.
Unfortunately, there is no exact science for predicting where rates will go. With so many factors to consider, tomorrow’s rate is still anyone’s guess for express home buyers in Maryland and other states.