interest rates..where they going?

[jshouse]

over the next 6 months? 1 year? i keep hearing about a rate increase in june, what do you think? we are looking for a house to buy or build, just wondering if we build and dont close for 7-9 months what we will be looking at...

[SwampRabbit]

Not sure, but I wasn't worried about the rate when we closed, it was more about when we locked in. Granted this was 10 yrs ago, but when we had our house built, we secured financing and locked in our rate 4 months before it was finished and we closed. And actually, about a month after we locked in, the rates dropped enough that we could lock in again at 1/2 point lower. Again, that was 10 yrs ago, so maybe things have changed.

[Throwin Darts]

No one knows where future rates will be.

IMO they only have one direction to go and that is up. Will that happen in the next year? Who knows.

[ColinR]

I have a call in to my banker to ask his opinion. We should close on our build in 45 to 60 days.

[Nado]

I closed last year around June at 4.25% I locked it in because they kept on telling me the rate was good and it was going up and down while we were at making offers for what seemed like forever.

[John Paul]

Have had some meetings recently with some lenders regarding new Regulations coming out and one of the big topics has been, of course what are the rates going to do. The vast majority feel that within the next 18 months it will be up at least a couple percentage points.

As for me, who knows..

[Shane]

Short end of the yield curve will start to rise when the Fed starts raising the overnight lending rate (probably in June). Most expect the Fed to raise rates .25% every other meeting, so maybe a .75-1.0% increase by this time next year is all. They might start increasing .25% every meeting after that until they get back to 2.5 or 3% a year or more later, but time will tell.

That doesn't necessarily mean that the longer end of the yield curve in the bond market will see the same kind of moves at the same time. Mortgages are based on the bond market. I would guess that bond rates will rise some over the next couple of years, but again who knows? They might not. Lots of central banks around the world are now copying what our Fed did in cutting rates and buying bonds (quantitative easing), so bond rates around the world are probably gonna be low for a while. That might help keep US bond rates from rising much too. We'll see....

[HoustonHunter]

No one knows where future rates will be.

IMO they only have one direction to go and that is up. Will that happen in the next year? Who knows.

As a banker, I agree with this. I don't anticipate a shift--especially as the price of oil is low and slows the economy a hair. I too am going to be building a house and take a mortgage in 6 months but I think they will be about the same.

[Bill]

My observation is they always seem to decrease during the year leading up to a presidential election, and don't have a graph to prove it. Maybe it's political manipulation by the party in office to get votes?

[Stan R]

I have been in the business longer than many on here are old.

I broke my crystal ball a long time ago.

There are trends but that can change in a minute.

The trend lately has been somewhat stable with some instability creeping in. ;-)

It always goes up faster than it goes down.

If you like what you see lock it in!

Would you be more upset if you did not lock and it went up or if you did lock and it went down?

[jshouse]

if i locked then i was probably pretty comfortable with it at the time so i would be more upset if i didnt lock and it went up.

we are just weighing out buying an existing home right now that we are pretty happy with for under 4% vs. building exactly what we want and possibly seeing a rate increase.

[Throwin Darts]

Would you be more upset if you did not lock and it went up or if you did lock and it went down?

This is a good question to ask yourself.

As a banker, I see people falling over themselves all the time trying to pay big dollars to lock in or buy down a rate without ever running the math to see if it makes sense or not for the length of time they will have the mortgage.

[Throwin Darts]

if i locked then i was probably pretty comfortable with it at the time so i would be more upset if i didnt lock and it went up.

we are just weighing out buying an existing home right now that we are pretty happy with for under 4% vs. building exactly what we want and possibly seeing a rate increase.

if you buy existing with the intention to build later then you won't be holding that 4% note very long. if you are building your "forever home" then i'd do it now and get 30 year money locked in while its so cheap.

[SwampRabbit]

Do bankers still allow you to lock; but then, if the rate drops a certain percentage, lock at a slighty higher rate than that day, but still less than the rate you originally locked? That is what I did.

It was something like this: I locked at 6.0%. about a month later, the rate dropped to 5.375%. I called and relocked at 5.5%. On the books, they looked at it as them gaining 0.125% over the life of the loan vs having me walk away and finding a different lender that day. Now had the rate gone up during that time to say 6.5%... I was locked in already at 6%.

[txdukklr]

it needs to move up