So what has been going on with interest rates lately? It is important to know that according to all relevant surveys and expert opinions, mortgage levels will see little change in the current rates. The 30-year fixed mortgage rates tend to fluctuate in unison with the yield on the ten-year treasuries. This is not to be confused with the Prime Lending Rate that typically receives the most press. Ten-year treasuries are used to partially fund the national debt in the United States. Since the debt continues to grow, we have to continue to attract more overseas capital to fund our debt. When this capital starts to seek other safe havens and begins to dry up, the interest rate on the ten year notes start to climb in an attempt to attract more capital. The old cliché of supply and demand is applicable here, i.e. less demand = higher rates.

Depending on which economist you might follow there are predictions that financing the U.S. debt is becoming a more risky investment for our overseas investors and they are demanding a higher rate of return as compensation for their perceived risk, and thus drive interest rates higher. The trickledown effect is that long-term mortgage rates follow. The ten-year note is in a constant state of flux, and most predict that while rates may climb slightly over the summer, the ten year note will continue to trade in a fairly narrow trading range. The impact on mortgage rates will typically also follow this narrow trading range. We can expect mortgage rates to trend slightly higher but still remain near historical lows.

What this boils down to is simple. It is still a perfect climate for buying and selling property at reasonable prices and reasonable rates. You can feel confident that we can assist you in not only finding that perfect new home or vacation property for your needs, but that we will also be able to help you navigate successfully through the mortgage process and secure the best possible rates and plan to suite your need. The Florida market has always maintained a strong and constant level and according to all forecasts, that will not change for the rest of this year. We look forward to a strong year and we are here, ready and able to help you!

Posted by Carlos German on

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