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Mortgage Rates Are Moving Up

 

The FED lowered rates, but mortgage rates have moved up, here are the reasons:

Mortgage rates have steadily moved up over the past three weeks. The yield on the 10 year bond a leading indicator of mortgage rates was as low as 3.8% in mid November and now sits at 4.23 %. Thirty year fixed mortgage rates have moved up as well from below 6% to around 6.25% in the past 3 weeks. The big reason for the increases can be tied into the housing industry, concerns over inflation and lingering credit market issues. The stock market has been very turbulent in 2007 and continues to digest the latest economic news. The FED cut the fed funds rate by an additional quarter point this month, but the market was hoping for a 50 basis point move. There are two forces working against one another with this market, inflation and a slowing economy, all tied together with a poor housing industry and troubled credit market. In addition to the increases from the economic side, the two largest companies that securitize mortgage loans (Fannie Mae & Freddie Mac) have begun to institute new fees on their mortgages that will lead towards slightly higher interest rates. If you are in the market to refinance or purchase your mortgage it may be a good time to lock in your mortgage rate before you miss a chance to secure near historic low rates. In these turbulent times, there is no crystal ball for where current mortgage rates will be in 2008.

12-15-2007 ? LoanNetwork.com

 

 

 

 

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