According to a May 29th, 2009 article posted by CNNMoney.com, Both mortgage and interest rates have risen above 5% and will remain there for sometime. This past week mortgage rates peaked at 5.45%, which is the highest recorded rate for this year.
The reason for the increase in rates has been linked to the great deal of debt that the United States government has been issuing in the form of treasuries or bonds. Recently the supply of treasury bills has begun to increase with little response from buyers. This has led to a direct hit on mortgage rates, pushing them well above the 5% mark.
The Fed will attempt to counteract the rise in mortgage rates by increasing treasury prices and lowering yields. They will do so by purchasing more longer-term treasury securities over the next six months.
The message: 5% rates are still low, but who knows how long they will remain that low? Take advantage now, before they go back up.
June 7th, 2009 at 2:45 am
Yep, we missed the good low rate. We were planning to re-finance but didn’t get out paperwork together right away. We will still do but not at the low rate we were hoping. I agree, the rate might not go down any more