Have mortgage rates hit bottom?

For anyone searching for a home mortgage over the past year or so, the historically very low rates have been a dream come true.

Recent events in the money markets have pushed 30-year financing above 4%, so a lot my clients and friends are asking how long this really inexpensive money will last. Well during the last two weeks of March, the average 30-year rate has slipped back so the outlook for now, based on numerous assessments, is not yet.

30-year mortgage rates 2007 to March 2012. CREDIT: CSMonitor.com

That said, if you’re in the market for mortgage financing, anything close to 4-5% is a relative bargain if you look at rates dating back to 2007 (see accompanying chart).

Since January, the Federal Reserve has been saying it will keep its easy-money policies in place until late 2014, according to The Wall Street Journal. The goal is to keep interest rates for households and corporations very low to spur the borrowing and investment needed to put America’s recovery on a sounder footing.

Recently, though, investors have ramped up bets that a rise in the Federal Reserve’s key short-term interest rate, the federal funds rate, could come sooner. That has pushed up market interest rates.

The upshot: don’t procrastinate over a few hundred “basis points,” as the mortgage pros call them. Some people refer to that as “bottom-fishing.” In the end, it doesn’t pay if you’re putting your next dream home at risk.

I’ve been working with very reliable and trustworthy mortgage brokers throughout my career and can connect you with very competitive, if not THE lowest cost, offers in the Metropolitan Washington, DC area.

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