Mortgage Rates Creep to 3-Year Lows

Mortgage rates have now crept ever so slowly that we are very close to the rates we had back in May 2013.  Of course, we still have a ways to go if we want to get  them back to the levels we had in 2012, but I and a few others never thought we would see these rates again once we had starting climbing three years ago.

Back in February, we raced to these levels as the perfect storm was brewing both here in the states and in Europe, but of course, as fast as we got there, we left the ground and had lifted off to where we are now slowly coming to those levels then and are trending lightly.

This week was dominated by the rush of foreign investors to US treasuries with other global rates at or about zero, less by far from yields and safety in US debt. Today the German 10yr bund traded at one point in negative territory.  Rates in Asia also moving to unchanged and lower. Not much US data this week, the Treasury auctions were very strong from foreign buyers, with record demand on the 10yr on Wednesday.

Next week can play havoc on what has been accomplished thus far with these lower rates.  You absolutely do not want to risk losing these current levels, so if you are still floating, you need to be aware of what is happening.  First is the Fed announcement on what will happen with the Fed rate, and we all know that there will be no chance of a change, but still some are speculating July, and there is still too much negative data to support that theory.  The other issue is the British vote to exit the European Union on June 23rd, but it really depends on what poll you follow as it is anybody’s guess on what will happen on June 22^nd.

Today we have seen the lowest level on the 10yr Treasury in two years as it closed out at 1.64%.  I am still anticipating for rates to decline even further, but with the news coming forth on the FOMC, and in Europe, I really do not know how much further we will see the improvements from where we are today.

In summary, rates continue to test new recent lows caused by foreign interest rate action.  With foreign interest rates hitting new all-time lows, one has to wonder "how low will it go"?  Remember what goes up must come down and vice versa. But as always "the trend is your friend", and the current trend is lower rates.  Loans closing in 15 days or less should consider locking, and others need to address their risks levels.  Have a great weekend.