VOLUME 11, FEBRUARY, 2021
VOLATILE INTEREST RATES
Rates in the last week and a half have shifted drastically and continued to do so this week. Below is the 30yr Bond Chart directly from the market.
The lower the blocks go in the chart, the higher the interest rate/pricing will be. The higher the blocks are on the chart, the lower the interest rate/pricing will be. The green blocks reflect positive movement towards the top, for better pricing and the red blocks represent lower movement, for higher interest rate(worse pricing).
Now this volatility is expected in a new election year, new stimulus bill conversation, vaccine availability, etc. Can we bounce back from this? The hope is yes, but we cannot give a timeline on how quickly that will be. It is virtually impossible to time the market perfectly.
Interest rates in the low 3% are still historically low. The bond market thrives off instability and that is what the pandemic did, 2-3 years from now, we will be wishing we could obtain rates this low.
We have to keep in mind that the rates in the mid-high 2%’s will not be around long-term as the low rates were connected with the pandemic and its effect on our economy and the instability it caused. The pandemic had a negative effect on our economy, our country and our small business owners. Now that we have stimulus bills, vaccines and an outlook on Covid, rates may increase as these things indicate stability in our economy.
The goal of purchasing a home should not be solely based on interest rates as there are other important components to consider, such as real estate appreciation, building equity, no longer renting, etc.
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©2021 We Fund LA is a division of Finance of America Mortgage LLC | | NMLS ID #1071 (www.nmlsconsumeraccess.org) | 300 Welsh Road, Building 5, Horsham, PA 19044 | (800) 355-5626 | Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act. Restrictions Apply. Programs and terms shown are effective as of 7/17/20 and are subject to change without notice. Rates, points, and APR are subject to change until you lock your interest rate. When you apply, we will determine the actual loan amount and credit terms available to you and may be required to offer you credit on different terms. In certain situations, we may not be able to extend credit. Turn times are for Southern California only. Appraisal turn times may be different depending on location of property.
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