What's the Story Behind 4.5 Percent Mortgage Rates?

Lately I have been hearing a lot of comments and questions regarding the potential of 4.5 percent mortgage rates.

The news clip above from NBC Today is just one example of the numerous publications reporting on the possibility of a Treasury sponsored rate drop to four and a half percent interest rate. The story as it has been reported was a “leak” of a potential action from the government, but the story is purely speculation.

Without any factual information provided by the leaked story let’s look at a few keys to the mortgage market:

1. Mortgage rates are based on supply and demand of mortgage backed securities. They are not based on the Treasury.
2. Government involvement with the mortgage market does not ensure lower rates. As an indication, mortgage rates are up a half percent since last week.

The one thing that we do know is that mortgage rates, although volatile, are very low in comparison to the past few years.

So if you believe that your rate is too high or that you could benefit from a refinance, give me a call or email. I'll recommend the best option for you as rates are frequently changing. Besides, if after your closing rates reach 4.5 percent, we will refinance to the lower rate.