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 October 30, 2009

Clues to Rising Mortgage Rates
Below are a few points to look out for when watching mortgage rates.

Mortgage interest rates have been at historic lows for many months now. Savvy buyers should look to the following points while watching for signs of possible increases in rates.
Mortgage interest rates have been at historic lows for many months now. Savvy buyers should look to the following points while watching for signs of possible increases in rates.

1. Read the minutes of the Federal Reserve Board's meetings. Look for verbiage noting "no policy change" or the Fed's stance on the impact they feel a weak economy will have as opposed to rising inflation rates.

2. National unemployment figures. The current unemployment rate across the nation stands at 9.7%. When we see large numbers of Americans return to work, interest rates will likely increase.

3. Increase in the Discount Rate. The discount rate that the Federal Reserve charges banks to borrow from them is at 0.5%. If this increases, or the difference between it and the Federal Fund rate becomes wider, an increase in mortgage rates is likely to occur.