What goes down will probably go up. No we don’t have the law of gravity mixed up. One of our knowledgeable sources at Wells Fargo has, for the longest time, been forecasting rates to increase and most thought he was nuts. Especially when rates hit the floor last spring to the mid 4% range.
Now he tells us that rates WILL increase… Probably in the next 45 days. The Government has announced that they will STOP buying mortgage-backed securities starting March 31st 2010. Our Wells loan officer says that this fact has kept the Conforming Rates so low since Q4 2008. The media is starting to report this so just a little heads-up. You can expect rates to go back to the 6% range or higher. A lot of buyers that can qualify at today’s rates of 5% will not qualify with this increase.
Things will soon get more interesting or scary depending on how one looks at things.