Just when everyone thought rates were on a straight trend line pointing down! A few days ago, on Friday, December 4, 2009, there was a fairly bullish jobs report. Bond yields jumped up, hence, interest rates rose a bit. For a few days, I was locking-in clients at 4.75% with zero points on a 30 year fixed-rate conforming loan. A conforming loan is a loan that is equal to $417,000 or less.
But as of Friday’s jobs report, rates had jumped to 5% with zero points by the end of the day.
The question on everyone’s mind is how long can interest rates stay low. The Federal Reserve has made it clear that when they see stability in the economy they will have to raise rates. Stay tuned, it could be a rocky ride.