Average Mortgage Rates Will Get Interesting This Summer

Average mortgage rates were all over the map at the end of May and beginning of June.  When the 10 year treasury rate hit right below 4% we saw a heavy sell off and overall interest rates pulled back as well.  We have seen a gradual move sideways to down over the last few weeks, but that is likely to change very soon.  The 10 year as well as the 30 year fixed rate mortgage are both at the bottom of their upward trend channels so we are likely to see an increase in volatility and overall rates.

This is not good news for anyone who has the desire to buy a new home or refinance their current one.  If you have been sitting on the fence waiting for rates to go below 5%, it might be the time to get ahead and make the move.  If you wait until the end of the summer, there is a good chance that you will be looking at overall rates around 6%.  This could mean several hundred dollars a month difference in your mortgage payment. 

Ultimately we do not know the the trend channel will be broken to the downside, but what we do know is that there has been a huge sell off in the 10 year treasury rate.  When there is a breakdown of the trend channel, it is usually after a weak bounce, not after a huge sell off.  With that being said, now might be the best time to go after that home loan modification if you have had financial troubles and you need your home loan modified.