What’s Up With Mortgage Rates?

What’s Up With Rates?

All the talk right now in mortgage circles is not “if” the mortgages rates will rise but “when” – and the rise has already begun. While we were enjoying the Holidays, rates crept up by about .250%. Remember, it’s the Fed’s program of buying Mortgage-Backed Securities (MBS’s) that has kept mortgage rates artificially low. The program was extended once and is now set to expire March 31st. It is estimated that this part of the Stimulus package has kept rates about 1% lower than they would have been without the program. If the Fed stays true to their word and does not extend the program again, rates will continue to rise as we approach that deadline. It’s loans that are closed in January, February and March that will be sold by lenders to Fannie Mae and Freddie Mac who in turn will securitize them into MBS’s in April – after the deadline. That means that rates must rise before the deadline.

The bottom line – don’t wait to buy or refi. The end is near.

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