Days of Home Loan Rates Under 4% Are History

Home loan rates dropped slightly today, but that should be viewed as an opportunity to lock the loan on your existing home purchase contract, not a trend.

After moving up to a range of 4.75 to 4.875%, the most prevalent 30-year fixed conventional rate quote (best-execution) is better characterized by a 4.625 to 4.75% range today– better than yesterday, but still the 2nd or 3rd worst day in more than 2 years, depending on the lender.

Tomorrow brings the first substantive economic data of the week as well as the minutes from the most recent Federal Open Market Committee Meeting.  Economic data is increasingly important to rates as a bad economy is the only thing that will change what seems to be the Fed’s inevitable decision to reduce asset purchases that have been suppressing rates.  Much of the recent rise in interest rates owes itself to the assumption that those purchases will indeed be reduced.  Lousy-enough economic data would throw water on that assumption. But, we don’t want lousy economic news, do we? (Update 8/21: Fed minutes released confirm that taper will begin this Fall.)

The longer term expectation is for the overall path of interest rates to move higher, even if they manage pockets of correction.  Such pockets should continue to be viewed as opportunities to lock.  If we’re to see a more concerted push lower in rates, it would likely require a pronounced shift in the tone of economic data.  We’d have to start losing ground in the economy instead of holding steady and slightly improving.

Now is the time to lock in your housings costs for the next few years by buying a home before rates and housing prices get even higher.

Consult with local Flagstaff mortgage lenders.

To buy or sell any Flagstaff home, please contact us: Flagstaff Elite Team at RE/MAX Peak Properties.

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Flagstaff, AZ 86001
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