Interest Rates May 14th, 2008
On May 13th mortgage bonds worsened considerably, causing interest rates to rise around .125%. Talk of inflation had a negative impact on the market as multiple Federal Reserve members made comments about inflation becoming a bigger problem.
Mortgage Rates have been on a roller coaster lately making it very difficult for consumers to determine when the right time to lock in their mortgage rate is. We’ll ve watching mortgage bonds closely on May 14th, to see if there will be a reversal or if this is a new trend. If rates worsen further on May 14th it would continue our journey to higher rates, hopefully we will see a reversal so we can see keep rates at low levels this week.
As it stands right now mortgage interest rates are averaging the following (May 14th, 2008):
Conventional 30 Year Fixed Interest Rate: 5.875%
FHA 30 Year Fixed Interest Rate: 5.875%
VA 30 Year Fixed Interest Rate: 5.875%
There is a lot of pressure on the FHA right now to do more to help homeowners in trouble. We are closely watching this legislation as it will make low fixed interest rates available to even more people - which is good.
The retail sales index came in better than expected today (when removing new car sales). This shows that consumers are still spending money which is bad for mortgage interest rates. The fed made some comments that they are prepared to more action if needed which would mean cutting short term rates more - which would REALLY HURT MORTGAGE RATES.
I think its very important for everyone to realize - WHEN THE FED CUTS SHORT TERM RATES, MORTGAGE RATES GET WORSE. Rate are still near historic lowes and are not going to get any lower. If you are hanging on out there for a lower rate, I urge you to consider locking in. Rates will not be this good forever.