The mortgage rates hit a recent bottom in early September, and have gone up substantially over the past few months. If we look at a chart of the 10 year note (direction most closely correlates with mortgage rates), you can visually see how the rates jumped from approx. 2.0% to Friday’s 2.66% in only 4 months.
The 2.66% level is critical as several times since 2014 the note has gone up to the 2.635% level, and then has backed off. That creates a technical resistance level at the 2.635%. If the note rate stays higher than the 2.625% over the next couple days, the next major resistance level is at 3.04%, another .4% higher from here.
Primary reasons rates have been going up:
Federal Reserve started to liquidate it’s $4.5 trillion balance sheet they accumulated in their Quantitative Easing artificially dropping interest rates. They will be increasing the amount they’ll be rolling off the balance sheet every quarter.
Foreign buyers have been backing away from buying US bonds and mortgage backed securities, as the dollar has weakened relative to other currencies
Strength in the economic statistics, and perception that new tax bill will add to to the strength and inflation
Federal Reserve continues to increase the Fed Funds Rate on a consistent timeline
Unless there’s an economic shake up in some capacity, don’t expect mortgage rates to go back into the 3% range again.
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