As I begin this post I notice I sure have taken some time between posts! Too much face down in my work I guess. :)
Time to share some thoughts on mortgage rates as we have reached lows for the year, and lows that are 11 month lows.
Take a look at the mortgage-backed securities chart below.
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| FNMA 3.5% Coupon 3 Month Chart |
What's going on here?
This 3 month chart shows mortgage bond prices going higher the past three months. In this chart, green is good for lower rates and red is bad and brings higher rates.
Those horizontal red lines show areas where we expect price resistance to exist. Resistance to higher prices. As you can see this past week the prices have been moving sideways, in a narrow channel. This chart pattern looks like the market is attempting to break that resistance and go higher.
Now, for a longer term perspective, check out this 2 year chart below.
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| FNMA 3.5% Coupon 2 Year Chart |
Most fundamental aspects of the economy, where we sit in the waning of Quantitive Easing of the Federal Reserve, and the duration of the time we've had such low mortgage rates leads one to believe that mortgage rates should be going higher.
If current resistance levels hold, that will likely be the case.
But......but......it pays to heed the market price action at these levels. As we've learned the past handful of years, it is very hard to predict what will happen.
Stay tuned!
GREAT NEWS FOR HOMEBUYERS
The bottom line of this blog post is that if you are planning a new home purchase during the busiest time of the year of the year for purchases, you are getting a nice market gift of low rates.
THINKING OF A REFINANCE
If you are in need to refinance your mortgage financing, here is your window of opportunity to save on the cost of the interest.
Of course I can help on either of those needs. To loop me in, please call at 952-886-7227 or get my contact info at www.brettgrendahl.com
Brett Grendahl
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