Mortgage Rates Continue to Yo-Yo in 2011
The last week of 2010 saw a dip in interest rates. The small drop (about 8 basis points on the average 30-year fixed rate mortgage) brought rates back down under the 5% mark. This is the second time in recent weeks that we have seen rates yo-yo around this area. The question those closest to me keep asking is, “What will happen tomorrow?”
A Popular View
One thought as we look to the rest of the month is that rates will go up. With housing and unemployment beginning to stabilize and stocks quite strong, this opinion has merit. Add in the fact that numbers are up for energy prices as well as the blue collar job sector, and you have a recipe for rising rates.
Big Roadblocks
Though housing is recovering, it isn’t all the way there. These soft markets are vulnerable to tax increases. Another issue that could impact both market strength and taxes is the number of unemployed. While unemployment has dropped recently, it is still quite high on a national level.
My Thoughts
I don’t think we should read too much into the last month of 2010. Rates increased into December and stayed relatively stable throughout. This is not surprising. Over the next month I think rates will ultimately increase. Whether they have dipped for the last time under 5% remains to be seen.
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- RBI Monetary Policy Review
- Consumer Sentiment: A Mixed Bag for March
- Consumer Sentiment: A Mixed Bag for March
- Real Estate Sales and Prices on The Rise in Edmonton
- Home Values Expected to Drop This Winter: Are You Prepared?
