If you check the 30 year and 10 year bond rates you will notice that they have been moving upward since September 18th (the date the Fed cut Prime Rate). Although all the news reports like to say that a lowering of Prime will result in a lowering of consumer rates, it is not always true. You are looking at two opposing forces. Prime is a quick change rate designed for short term borrowings. Home rates are effected by the 10 and 30 year Treasury Bill. The Federal government has just gone over the National Debt celling cap and is asking Congress to increase it from 8900 Trillion Dollars. This will mean more Treasury Bills will be going out. the effect will drive long term rates up. Also note that the long term and short term rates were equal or near equal in 2006. This is not the norm. These rates are trying to seperate (spread) to a normal. Another problem is that many mortgage companies have been hurt by the recent credit problems and they have less funds available. God hope your loan is not over $417,000 and falls into the jumbo rate. But there is good news there as Congress is looking into moving the jumbo limits up to $700,000. Right now there is no clear answer to your question.
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10-12-2007, 10:56 AM
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