Explanation of Increasingly Low Mortgage Rates Revealed

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In response to MarketWatch’s recent in-depth analysis of the U.S. housing market, RoadFish.com men’s lifestyle and finance magazine encouraged readers considering refinancing their home or purchasing one to take advantage of the nearly record-low mortgage rates, as they are predicted to eventually climb


So for folks who are considering refinancing a house or purchasing a home, my advice would be to take advantage of the current rates now because, who knows, it could be another 40 or 50 years until we see them this low again.

RoadFish.com men’s lifestyle and finance magazine today urged those of its readers who are toying with the idea of refinancing their home or buying a house to consider acting fast, as a recent evaluation of the housing market revealed why mortgage rates are at a near all-time low and why they may be turning around soon. In fact they are so low that mortgage rates have even exceeded the expectations of professionals, begging the question of how mortgage rates are continuing to decline every week.

Amy Hoak of the Wall Street Journal’s MarketWatch reported that before the week of June 14th, rates on the average 30-year fixed rate mortgage broke record low levels for six straight weeks. During the week of June 14th the same rates averaged 3.71% as quoted by Freddie Mac. In her article, Hoak deftly addresses the curious situation of U.S. mortgage rates continuing to decline even as statistics show that the housing market is making a comeback. Hoak points out that factors from abroad play a large role in influencing mortgage rates, and that there are additional issues within the U.S. federal government that citizens may not be aware of that are influencing the housing market.

RoadFish.com urged its readers to heed the information in Hoak’s article and act on it, if that is their intention. RoadFish.com’s Senior staff writer is quoted as saying, “This is a big deal. Mortgage rates haven’t been this low in over 40 years. I checked Freddie Mac’s table of the monthly average rate for a 30-year fixed rate mortgage, which goes back to 1971, and it doesn’t even begin to touch the rates we’re seeing in 2012. So for folks who are considering refinancing a house or purchasing a home, my advice would be to take advantage of the current rates now because, who knows, it could be another 40 or 50 years until we see them this low again.”

The above-mentioned MarketWatch article reported that one of the biggest domestic factors in influencing interest rates is the U.S. Federal Reserve’s Operation Twist program. According to Freddie Mac’s chief economist, Frank Nothaft, this program is based on the U.S. Federal Reserve purchasing long-term securities and selling so called “short-term” debt, which in turn keeps the interest rates low for the moment. The article also reports that the Eurozone crisis is currently playing a big role in the state of mortgage rates within the U.S. Concerns revolving around the continued integration of the euro zone is causing investors to transfer more money into places where they believe it will be protected. In so doing, this move affects yields on investments (such as 10-year Treasury notes) by decreasing them. Hoak reports that the mortgage market uses yields on the 10-year Treasury as their baseline when determining interest rates for 30-year fixed interest loans, so the yields on investments has a direct impact on affecting the mortgage rates.

RoadFish.com also encouraged readers to do their research and prepare for a large financial move such as refinancing or purchasing a home, and not simply to take advantage of the current rates if it is not within their means. RoadFish.com’s Senior staff writer is quoted saying, “The most important thing to remember with any major financial decision is to do your homework. Adopt a ‘buyer beware’ mentality, because then you will research high and low and get a solid amount of information before proceeding. Also, you need to do what’s best for your own financial situation. Yes, the rates are incredibly low, but if purchasing a house this year is not within your budget then don’t jump on it simply because it’s a good deal. As I said, do your homework. Study your budget. Work on your credit report. Make sure your decisions make sense, and are not impulsive.”

Hoak’s article concludes by stating that these all-time-low mortgage rates are expected to eventually being climbing. The last time that mortgage interest rates bottomed out to as low as they are today, it was April 1956—fifty-six years ago.

About RoadFish.com

RoadFish.com is an online men's lifestyle and finance magazine targeted toward men in their 30's and 40's that have already attained a moderate level of success in life, and are striving toward more. It goes over current events of interest to this group, such things as exciting adventures, consumer interests, hot chicks, and the latest in national politics as well as ways to make more and save more money. It is a publication owned by Purpose Inc.

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David Klein
Purpose Inc
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