Fence sitters might want to take notice. Home loan rates are at it again…the bulls pushed the bears around and the Bond market moved higher over the past week driving interest rates lower. Some say it is a 50 year all time low, although we have touched this low briefly several times in the since January 2009.
Today you can own more home for less money than you could just a mere month ago. And it is a great time to refinance your property too…if you think you might stay a while.
But if you are wondering…is this the best they will get? Will they go lower? Will they move higher?…the answer is probably, maybe, and yes.
There are 4 major reasons that interest rates will be moving higher, and I’ll explain these in greater detail over the next several weeks. The reasons are: 1) soverign debt in Europe and the headwinds for a downgrade in U.S. credit rating; 2) Inflation; 3) makings of a shift in Carry Trade; 4) the sale of Fed held Mortgage Backed Securities (MBS).
In addition, the bond market is ripe for a reversal…and something will trigger it. When that happens, look for the market to move quickly and without warning. Time waits for no one…when home loan rates rise, they will rise quickly.