Interest rates up to 3.60% on 30 year fixed mortgage for first time in 24 weeks
Anyone who follows the regular South Florida real estate updates in this column knows that volatility has become the norm lately. From sales to inventory there has been a lot of movement so why not have interest joint the volatility party. And man did they ever.
Borrowers have become accustomed to record low interest rates and with the Fed continually telling us they intend to keep printing money and holding rates at historically low levels for the next couple years. But with the growing debt crisis still being kicked down the road by our “leaders” anything can happen and investors still have a lot to say about where rates move. And last week they moved in a big way mainly as investors dumped bonds to move into securities as the stock markets set highs that we haven’t seen for years and are now within 150 points of the Dow hitting an all time new high.
As of Sunday, the average overnight rate for a fixed 30-year mortgage as reported by Bankrate.com was at 3.6% up 14 basis points from where we stood one week ago and the highest week ending rate we have seen since way back on August 19th of last year. It has been 19 weeks since they even peaked their head above 3.5% so this was a big move. The benchmark 15 year fixed rate was at 2.91% down 7 basis points from the previous weeks’ level while the benchmark 5/1 adjustable rate mortgage remained fairly stable rising only 1 basis point to 2.82%.
So last week lenders were quoting rates they haven’t seen since September and leaves us wondering once again if those ultra low rates are forever heading into the history book. Many prognosticators state that we will never see the 3.36% rate that we enjoyed back in early December while others see more downward pressure ahead.
There is still so much turmoil in the overall economic picture with slow growth and high unemployment appearing to be stagnant one would think we will see rates settle back down and the latest movements are just insignificant spikes but time will tell. If the Dow Jones keeps moving northward look for rates to continue to climb.
One thing is certain; historically speaking it is still a wonderful time to be locking in long term financing…….