So I disappeared for a while as I tried to work through the holiday season. Just prior to Thanksgiving rates started falling we saw refinance activity begin to pick up. Then on December 15, 2008 we saw a huge rally on mortgage backed securities push the 30 year down to historic lows. Some were lucky enough to lock in at 4.75%. That lasted for all of 2 1/2 hours and then investors pulled pricing and rates went back above 5%. Since then we have seen little drops followed by upward pressure keeping the 30 year around 5.25%. Still lower than 2003 and now we have this news:
http://www.marketwatch.com/news/story/Banks-rise-Fed-details-planned/story.aspx?guid={EA305A84-90F7-44BF-8DF3-B0DD3687F789}&dist=hpts
Going into 2009 there will be more pressure to push the rates down to 5% or below. There is not a target number that the Fed is releasing for where they want rates, but you can be assured there will be more days like December 15, 2008 in the future.
For those wanting to take advantage of these rates I highly recommend talking to your mortgage professional and getting your application completed and all closing costs agreed upon ahead of time. Put a plan in place to lock at a rate that makes sense and then when the opportunity arrives for you to lock in to the rate it only takes a few minutes and you are locked in. Keep in mind when these opportunities arise, they don't last for days. The market or investors only want so much exposure and once they get their fill, they will pull that pricing. We never know how long it will last. Those that are prepared are the ones that benefit the most.
Have a safe and Happy New Year!
