Over the last week we have seen interest rates for fixed rate mortgages drop between .25% and .375%. Why is this you ask? Wall Street is taking positions based on what they think the Federal Reserve will do with short term interest rates. For those of you that are waiting until the Federal Reserve Board makes its announcement at 1:15 p.m. C.S.T. on Wednesday October 31, 2007 you will be too late. See my previous writings about how the market moves before and after a Fed meeting.
Other things to consider, with the 30 year fixed rate hovering just above 6% we are at a psychological barrier. For the long term rates to go below 6% takes tremendous pressure. I don’t see the economic reasons that would apply this pressure taking place at this time. There are too many other signals that rates should be going up as opposed to down. This could be your last time for 6 months to lock into that really low rate!
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