Interest Rate Forecast for August

The current interest rate forecast for August is very clouded due to the actions of the Federal Reserve Bank.  Earlier this week, the Fed decided that it would buy up more United States debt in hopes to put a cap on interest rates.  This pushed the yield of the 10 year treasury rate much lower which pushed mortgage rates down with it.  Unfortunately, the government is creating artificial mortgage rates rather than actual, free market rates. 

There is little doubt that the major cause of the economic disaster that we are in is the subprime mortgage crisis.  During this period, anyone with a heart beat could get a low rate mortgage on a home.  Not only were they getting a low rate, they were also able to borrow any amount of money they really wanted.  Lenders were creating income for these individuals so they could get bigger loans.  Now, the amount individuals can borrow is much less, but the government is, once again, giving people the chance at extremely low rates.

If you are a current home owner who has thought about refinancing in the last few months, now might be the time to do it.  The interest rate forecast for the short term is that rates are going to go down much further due to government actions.  There is little that is going to change over the next few weeks, so you might as well go out there and test the waters and see what kind of mortgage rate you can get.