The interest rates have been going up over the past month due to several reasons:
- The Federal Reserve is starting the liquidation of the $4.5 Trillion balance sheet accumulated during Quantitative Easing
- Money coming out of the bond & mortgage backed securities markets are being invested in the stock market pushing it to new highs. Strong company earning reports in conjunction with the perception that a tax reform/tax break may pass.
- Don’t fight the Fed… The Federal Reserve has prepared the market that it’s a high probability that they will be doing another Fed Rate increase in December, and economic indicators are solid
- The technicals have been bullish for rates going up. They’ve gone through several resistance levels, including a critical 2.385 level for the 10 year note
What to watch for:
- The next resistance level for the 10 year note is 2.635, so the rates on a technical level can go up another .25%
- If it is perceived that the tax reform won’t pass, money can come out of the stock market, driving rates back down.
Historically, mortgage rates are still great, but now in the 4’s instead of the 3’s.
If you are in the Los Angeles area, have any questions or real estate sales or financing needs, feel free in contacting me.
Ron Henderson GRI, RECS, CIAS
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals
BRE #00905793 NMLS #310358
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth