Archive for June, 2009

Please use Subprime Blogger to keep up with current mortgage rate trends.  There are also several articles available to assist you in getting a home loan modification.

Yesterday we saw a sideways move in the 10 year treasury rate; moving up slightly to 3.52%.  I still believe the the 50 day moving average will hold as support and we will see a bounce coming soon.  The equation used for the correlation between mortgage rates and the 10 year treasury rate is y = 2.7283(x)^2 + .5881(x) +.0308.

10 Year Treasury Rate - 3.52%
The correlation shows that the 30 year fixed rate should be approximately 5.48%.  Actual rates…

30 Year Fixed Rate Mortgage - 5.36%

As predicted yesterday, mortgage rates had to adjust to the 10 year treasury rate and that is exactly what they did.  Keep an eye on the treasury rate to make stronger mortgage rate predictions.

Please use Subprime Blogger to get your current mortgage rates forecast.  I am also producing daily mortgage rates each morning that shows the correlation to the 10 year treasury rate.

Over the last few weeks, I have mentioned that mortgage rates would likely move sideways or decline in a slight manner; this is exactly what happened.  I fully expected the 10 year treasury rate to fall to 3.4% where it should find support for two reasons.  The 50 day moving average is at 3.4% and the up trend channel shows support at the same exact area.  For more clarity, check out this chart.

If this does hold support for the 10 year treasury rate, look for mortgage rates to find support as well.  I expect rates to be lower this week as the 10 year should fall to its 50 dma but I will make the prediction that we will see a bounce from there and mortgage rates will follow.  With that being said, my mortgage rate predictions for this week are as follows:

30 Year Fixed Rate Mortgage - 5.27%

For any of you looking to refinance or lock in at a low level, now might be the time as a strong support level is going to be tested.  We are sure to see government interaction when the mortgage rate trends upward, but how many treasury bonds can they possibly sell?

Please return to Subprime Blogger each morning to get your daily mortgage rates along with the 10 year treasury rate.  The correlation between the two is quite strong and often predicts a strong move in one direction or another.  You have a much better understand of mortgage rate trends when you see the trend of the 10 year treasury rate.  The equation used for the correlation between mortgage rates and the 10 year treasury rate is y = 2.7283(x)^2 + .5881(x) +.0308.

10 Year Treasury Rate - 3.506%
The correlation shows that the 30 year fixed rate should be approximately 5.477%.  Actual rates…

30 Year Fixed Rate Mortgage - 5.25%

This means that either the 10 year will fall soon or mortgage rates will bounce higher to correlate with the 10 year treasury rate.  Only time will tell, for those of you interested, the up to the second 10 year treasury rate can be found here.

Return to Subprime Blogger in the next few days to get this week’s mortgage rate predictions.  I would also encourage you guys to stop by a new website created by a good friend of mine, if you need any financial tips, he is the guy:  Healthy Financial Habits.

When analyzing the charts, it looks as if mortgage rates may bounce higher in the next few weeks.  The 10 year treasury rate has been in a steady downtrend since it reached 4%.  The pullback has brought it all the way back to 3.5% but it looks like there is support at the 50 dma at 3.4%.  If this level holds as support, look for the 10 year to bounce and move a bit higher as it is highly oversold.  If this downtrend is broken to the upside, look for the mortgage rates trend to do the same thing.

It will be very interesting to see if the government offers more bonds up for auction to keep interest rates low.  About two weeks ago I mentioned that this would push mortgage rates lower and that is exactly what happens.  Unfortunately, the government is going to run out of options if they keep pushing this country further and further in debt.  With that being said, it would not surprise me at all to hear Ben Bernanke announce that the Federal Reserve Bank is going to buy back billions more in Mortgage Backed Securities.  A few days after that we are likely to hear Tim Geithner announce another plan to auction off bonds.  All of this is going to push mortgage rates lower, but how long will artificial mortgage rates last.

Low mortgage rates are great for home owners, but eventually all of this debt is going to come back to bite the government in the ass.  I sure hope that our President and his staff have a damn good solution to get out of the trillions of dollars in debt we are already in.  Ultimately, this is going to hurt the housing market in the long run, but obviously the elected leaders don’t care about that right now; they just want mortgage rates to be as low as possible.

I am going to starting posting the daily mortgage rates each morning; please return to Subprime Blogger when you are looking for your daily mortgage rates.  Along with that, I will post the 10 year treasury rate and show the correlation.  The equation used for the correlation between mortgage rates and the 10 year treasury rate is y = 2.7283(x)^2 + .5881(x) +.0308.

10 Year Treasury Rate - 3.506%
The correlation shows that the 30 year fixed rate should be 5.477%, actual rates….

30 Year Fixed Rate Mortgage - 5.35%