Rates This Low Can't Last Forever

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Rates This Low Can't Last Forever Close

Rates This Low Can't Last Forever

Posted by Eddy Kicker on Monday, October 12th, 2009 at 4:28pm.

The following information is provided by Bert Karrer with Regions Mortgage.

With rates currently this low, below 5% for a 30 year fixed, it’s important to understand that they won’t last. If you’re prepared to either buy or refinance, don’t balk at today’s low rates thinking that they may fall significantly lower.

Earlier this year (2009) the U.S. Federal Reserve set a goal of buying up to $1.25 trillion of agency MBS (Mortgage Backed Securities), The Fed's purchases have helped lower mortgage rates, making homes more affordable amid the worst housing slump since the Great Depression. The $1.25 trillion will be used up in November or December of this year.

With the Fed’s downward pressure on rates fading, conforming rates may not be this low again for a long time.

While I don’t foresee an extraordinary increase in rates anytime soon, upward pressure is just around the corner. Also, it’s important to note that even if rates do increase by half a percentage point, for example, it doesn’t mean that affordability is out of reach.

The best advice we can give is to always be prepared. If you’re interested in refinancing, have a rate in mind so if rates are trending downward, you’ll be able to lock in quickly and save. Waiting for rates to fall “just a little bit lower” can get you into trouble if rates decide to shoot upwards.

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