Current Interest Rates – Week of 7/23/12

It’s difficult these days to come across any sort of business or world news that doesn’t include a message about our sluggish economy or the debt/financial crisis going on in Europe. I often find myself cringing and wondering when we’ll get to hear better news…then I remember that all of this bad news is actually GREAT NEWS for mortgage interest rates, homeowners and anyone thinking about buying or refinancing a home.

What happened with interest rates last week?

Interest rates started the week off with uncertainty surrounding Fed Chairman Bernanke’s report for the House and Senate. Investors and traders were looking for any hints of further quantitative easing, although Bernanke’s testimony did little to sway investors that there would be another round of bond/treasury buying. While the outlook on the economy is still bleak, the announcement of QE3 will have to wait for another day.

Although the economic releases for the week showed falling Retail Sales and an increase in jobless claims, interest rates continued to move along at our previously established historic lows. That was all until the global economy reared their debt ridden heads.

The bailout and debt in Spain has caused their Bond yields to spike well above 7%. Greece is at risk of default and talks have resurfaced about their exit from the European Union. Once again, the U.S. Dollar and Bond Market are a safe haven for global investors. The more they buy, the lower our rates will go.

 

What’s coming up this week on the economic calendar and what’s the impact on interest rates?

There are few economic releases scheduled this week that will have direct impact on bonds and interest rates until Friday when the GDP (Gross Domestic Product) figures are released. GDP is expected to come in at 1.2% and will be watched closely to signal if our economy is headed back into a recession.

Due to the lack of economic reports, investors will once again be watching the news wire to see how things progress/regress with Spain and Greece. The continuing bad news has led to further decline in the stock market, so any glimmer of hope would be an opportunity for traders to find some fast money, unfortunately at the potential expense of interest rates.

 

Here’s our strategy for the days and weeks ahead…

The 10-Year Treasury Note has fallen to its lowest level since the early 1800s. Interest rates trade each day setting or at least nearing all time lows. How long can it last? While I don’t see rates going up anytime in the immediate future, there’s no question that they will go up, and when they do, it will be dramatic.

So…we advise our clients to start their planning, create a strategy, find out what options are available for you with interest rates this amazingly low. Sure, rates could very well go lower in the months ahead, but what if you miss your window? What happens if rates are lower but your financial situation changes? What happens if rates go lower, but increasing loan defaults cause lenders to demand a larger down payment?

These are all real factors that have to be considered. We will help you plan, strategize, analyze, and project all of the options and figures that MAY be out there, but the only we know for certain is that NOW is the greatest opportunity that we have seen in centuries and lifetimes for someone to buy or refinance a home.

We maintain an ongoing dialogue with our clients about the market and interest rates throughout their financing experience so we can take advantage of the lowest rates when they present themselves. We all want the lowest rate, and the best way to ensure that you get the lowest rate, is to build a relationship with your mortgage planner, so they can best advise you on when to lock in your rate. Call us today for a complimentary mortgage review or Apply Online.