Will We Ever See 4% Mortgage Rates Again?

Mortgage rates went up again today and it seems like there is no end in site. Today the unexpected good number in jobless claims created a bad atmosphere for bond trading. This good economic number of jobs lost signals that the economy may be turning around and you know that when that happens, inflation is likely. So if inflation is likely, then bond investors will require a higher demand because inflation will eat up at their returns.

Remember that the bond investor knows he/she is only getting a low fixed payment for 30 years. If the inflation rate is ticks up higher and higher and prices tick up an up, then investors lose purchasing power on their fixed payment.

So will we ever see 4% mortgage rates again? It does not look like it. With the increased supply in bonds available for sale, investors selling bonds to free up cash for stocks and unexpected good economic numbers, it is not good for mortgage rates going forward.

If you have a question about mortgages and/or mortgage rates, you can call me direct at 908 868 0685 or email me at erodriguez@arkmortgage.com

P.S. No that is not me in the picture.