Mortgage Rates, Possible Technique for New Mortgages

With the FOMC (Federal Open Market Committee) winding down their monthly purchases of US Treasury and Mortgage Backed Securities (Pools of Actual Mortgages) it is not surprising to see Mortgage rates, specifically the 30 year rate move up, FOR NOW!

Key Technique for New Mortgages

Knowing you may not read the entire article… we are all busy, so completely understand, the meat of the following information is think twice before trying to “buy down” your mortgage rate. Yes, they (rates) have gone up and yes it is more than just a few quarters ago, but it is entirely likely that the next economic slowdown will welcome in lower rates. If you pay a lot of money to lower your rate now … your hurdle to refinance in the future is much greater!

Mortgage Rates Review

While we may think recent rates are sky high… let’s take a longer term view.

Source: Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US, February 22, 2022.

The Short Term View looks much different

Source: Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US, February 22, 2022.

Between FOMC lowering their monthly artificial purchases, interest rate markets front running the FOMC and a slight reversion to the mean … rates are higher than recently… but think twice before “buying down” that rate!

Have a Great “Mortgage Rate Analysis” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

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