Will Mortgage Interest Rates Drop?
Last Friday’s US jobs data might be an indicator that mortgage interest rates are on their way down. As economic data shows an increasingly difficult economy, lower mortgage interest rates may be expected as lenders seek to attract more borrowers. The worst jobs data in five years could be a good sign for mortgage interest rates, reports Origination Times:
If you were looking for rates to move lower, last week’s dismal Jobs Report was just what the doctor ordered. Rates reacted favorably as the Labor Department reported a much worse than expected loss of 80,000 jobs in March - which was the largest jobs loss reported in five years.
However, it is worth noting that mortgage interest rates haven’t necessarily been behaving as one would expect lately. They haven’t been keeping proper pace with 10-year Treasury notes due the fact that mortgage lenders are feeling a little wary of borrowers right now, and that has made mortgage interest rates a little less predictable. Liquidity has been one of the main reasons cited for mortgage interest rates and for reluctance to lend money.
They have been falling recently, though, and government efforts to increase liquidity in the market, as well as proof that the government is willing to help bailout the mortgage industry, should continue to help loosen things up.
As mortgage rates — along with home prices — drop, it becomes an increasingly attractive buyer’s market in the real estate world. If you have good credit and a reasonable down payment saved up, you should be able to get a good deal on a home mortgage loan. Not to mention having access to great home prices. Just make sure that you keep the recent subprime mortgage crash lessons in mind and only get a home that you can afford.
Tags: mortgage interest rates, mortgage rates drop, home mortgage loan, mortgage loan blog,
mortgage lenders, subprime mortgage crash, home prices
April 8th, 2008 at 5:51 pm
[…] Mortgage interest rates are heading a bit lower this week. They have dropped a bit, thanks to US nonfarm payroll data on Friday, as well as a bit of loosening on the credit market. Mortgage interest rates are now moving in a direction that puts them closer to their movements with bond prices. Originator Times reports on mortgage interest rates and bond prices: On a technical note, bonds are trading close to the bottom of their current trading floor, so if the continue to rise throughout the week rates will likely move lower. Remember, as bond prices move higher rates move lower. Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages. […]