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    North of NYC North of NYC By Houlihan Lawrence By Houlihan Lawrence by

    It is the beginning of June and I am absolutely amazed that we are still looking at historically low mortgage rates. Since January, I have been predicting higher interest rates by the middle of the 2010. What has happened is the average 30-year mortgage rates fell to 4.8% last week from 4.83% the previous week, according to the Mortgage Bankers Association.

    Like everyone else, I was bracing for higher interest rates once the Federal Reserve ended its $1.25 trillion in purchases of mortgage-backed securities at the end of March.

    Now with fears growing about Greece’s debt woes and whether excessive state borrowing will come to a head in Portugal, Spain, Ireland (the home of yours truly) and even the UK, we are looking at shaky global stock markets,  causing a “flight to quality” in the U.S bond market. The U.S. home buyer is reaping the benefits of  global economic uncertainty and the European debt crisis through amazingly low mortgage rates tied closely to the U.S. treasuries.

    LOCK OR FLOAT?

    Mortgage rates are at their best levels of the year. Consumer borrowing costs are at the mercy of the stock market right now. If investors continue to have a dim outlook on the global economy, stocks will move lower and mortgage rates will move lower by another 1/8 to 1/4 %. This only occurs if lenders decide to pass on the savings (maybe not with volume at these high levels). On the other hand, if stocks move upward, we will see Treasuries rise and consumer rates will climb.

    Remember, mortgage rates ALWAYS rise faster than they fall. With that in mind, I think that it will take something really bad (yet again) to get these rates to the 4.5% level on conforming loans. I am advising my clients to take advantage of these attractive interest rates and lock in today.