Posted by: Larry Stevens | April 8, 2013

RATE IMPROVEMENTS

RATE IMPROVEMENTS

While the future of the U.S. economy remains in question, there is no doubt that mortgage interest rates are historically very low.

The weekly jobless claims and payrolls component of the employment report last week were bad indicators for the health of the economy. The good news is that investors often seek safety in times of uncertainty and the bond market is often the harbor. Mortgage bond prices rose sharply on flight to safety buying last week and as a result mortgage interest rates fell precipitously.

Remember, the Federal Reserve has been one of the largest purchasers of mortgage-backed securities in an effort to keep rates low and stabilize the housing market. Following the March Fed meeting many members spoke to a possible slowdown of asset purchases. Markets don’t question if the Fed will slow purchases. There is uncertainty as to when this will occur.

Now is a great time to take advantage of mortgage interest rates at these historically favorable levels to avoid future market volatility.

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