In May 2009, Interest rates were at their lowest. 4.75% was indeed a historic low. If we look at national averages for June 2009, the interest rates are swinging around 5.75%.
Mortgage Trends for July 2009
If we look at trends, Interest rates for fixed mortgages are climbing up all over United States. This pressure on mortgage rates is mainly external. As some news reports suggest, The major players in US Debt market , are still not satisfied with the economical and fiscal measures taken by US Govt. This adds pressure on interest rates and liquidity situation in housing market is still very bleak. 
It’s Still A Good Time To Get Mortgage Refinance
Those borrowers who have decided to refinance, as well as those who are passing through the process of refinancing, should take the decision keeping in view the current market conditions and interest rates, the current conditions of housing market are indicating that the borrowers should not refinance at this stage. So what should they do? Should they quit and try again later?
I don’t think so that the only solution is to quit. Here are a few things that you should take into consideration before giving up on a mortgage refinance.
We might say that the rates are higher than they were, But they have not reached their peak,they’re still relatively low.
It’s All Relative
As once said by a very smart man, in the form of a mathematical formula, “It’s all relative.” Now this statement seems to be more true in the area of mortgage interest rates. Last month a full point rise like we’ve seen has been a part of conversation among the media people, they talked about this depressing stuff like a “stillborn housing recovery.”
How Much Can You Save by Refinancing?
You can use a loan calculator in order to compare the payment at 4.75 percent on a $300,000 mortgage to the payment at 5.75 percent on same size home loan . The monthly payment for the home loan at 4.75 percent will be $1,187. Whereas the monthly payment for the home loan at 5.75 percent will be $1,473 per month. So no doubt there is a significant difference between the two, but consider this:
Last year the average mortgage rate at this time was 6.8 percent.These days mortgage Rates are swinging on nature of news. Call it good luck or bad, there seems to be no lack of news these days. There are news going on about home price, politicians talking, Treasury auctions, stock market gyrations, number of jobless persons, government programs, and inflation fears. And nowadays, mortgage rates are moved by news.
Can Mortgage Rates Go Down Again?
Of course they can!
What type of news could move the rates towards lower values? Long-term Treasury bond rates are being watched by experts, it is the closest of anything. In the past the treasury bond rates had been at two percent, and they rise as the mortgage rates do rise, they have doubled since the mortgage rates have raised. That jump was initiated when Chinese politicians remarked negatively about the long-term prospects for the American economy.
Two Important Factors to Watch
The two interlocked factors i.e. the Treasury bonds and world sentiments about the progress and condition of the U.S. economy might play the most effective role in moving mortgage rates. These two factors are considered to be the most viable source of good news that could pull the mortgage rates back down.
Conclusion or Confusion
Despite of these facts, I still think borrowers who have given up on a mortgage refinance will not be able to take advantage of any good news that does move rates even lower. But still the million dollar question remains; Will the good news for economy move the mortgage rates up or down?
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{ 1 comment… read it below or add one }
Very interesting read from the US side of the downturn, I am currently writting about this from the UK perspective. I am expecting interest rates over here to start creeping up towards the end of 2009.
I wonder what would happen if the international monetary fund were to set interest rates globally. That would be interesting.
Anyways…. Cool blog, looks great