As you can see in this chart of long term interest rates going back to 1971, interest rates pertaining to the 10 year note and the 30 year fixed rate mortgage have never been lower.
To offset the economic effects of the COVID Pandemic, the Federal Reserve has been conducting Quantitative Easing (QE) and has been buying a massive quantity of bonds and mortgage-backed securities artificially lowering the interest rates. The Fed also dropped the Fed Funds rate to zero and conveyed that they’ll be keeping it low for a couple of years.
If we look at a chart of the 10-year note rate over the past few months, you can see the tight range the rates have been in, but it’s presently right at the top of the range at .78. If it breaks through the .78 resistance, we can see at least another 10 basis points higher. In addition to short term economic numbers, the bond market rates will move higher on a Stimulus Bill approval or a vaccine approval by the CDC.
Don’t be deceived. The Fed will scale back their $100B a month in QE purchases, letting mortgage rates rise to market levels, well before they increase the Fed Funds rate.
The bottom line, don’t procrastinate taking advantage of these historically low rates. Refinance, add to a real estate portfolio, it all makes better economic sense when utilizing low-interest rates and leverage.
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
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals (2017-2018)
Chairman – OutWest Marketing Meeting (Real Estate Education)
BRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
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
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