In our last update I was doubtful of any rate increase this year. Now with China falling, clearly there is fear of contagion to other parts of the world. We’re seeing some of the fear with the recent sell-off in the U.S. markets. Foreign countries will continue to push their rates down in the hopes that they can help their economy which will also create heart burn for the Federal Reserve to raise U.S. Rates. Sometimes when you wait too long you lose the opportunity and it becomes even harder to pull the trigger and this is shaping up to be one of those times. Indecisiveness by the Fed may have pushed any rate increase out to well beyond Q1 2016.
All of this bodes well for mortgage interest rates! Although the recent drop in rates hasn’t been as fast as one would expect, I think it’s best to be prudent and wait. All of the rush to lock in longer term fixed mortgage rates are over blown. Yes long term fixed rates are great but they do not apply with a broad brush approach to all loans and all situations. Sophisticated analysis and planning is the only way to determine what the best strategy is for any specific property.
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