After reaching the lowest levels in history, Texas mortgage rates have shot higher over the past two weeks. There is not a simple explanation for why this increase in Texas mortgage rates occurred, but looking at the many factors which are influencing Texas mortgage rates right now will help to understand what's going on.
Overall, we do not see that the fundamental economic picture has changes much at all. Technically, we are in an intermediate term bear market correction. One that could push the market to yields on the 10 year of 2.75%/2.78% (currently 2.70%). If correct, we should see good support from the 62% Fibonacci level (comes in around 2.75%).
Austin mortgage borrowers: best to take a conservative approach given the amount of volatility we expect.
Given the “juice” provided by QE2 (rumor or real), we may be set up for a blow off top and hard reversal
Just the thought of Quantitative Easing 2 has put a floor under Austin interest rates. Why many expect the Fed to move in that direction (November meeting), nothing has yet to happen. Fed Chief Bernanke is leading the QE2 charge, talking about “additional purchases” and how it was an “effective program” earlier in the year.
Today there will be a vote in the House on the Fair Trade Act which basically will designate China as a currency manipulator. The next step is for the bill to be sent to the Senate. It is not expected to pass in the Senate, at least before the November 2 elections and the November G-20 meeting (Korea Nov 11-12).
Overall, we see the stock market as moving away from any notion of a double dip, instead feeling a little giddy about taking on more risk. Reason being is that traders view one of two scenarios playing out, both good for stock prices.
With that in mind and the fact we’re trading at or near historic low yields, best bet is for Austin borrowers to lock in today’s great Austin mortgage rates and move on down the road.
