Las Vegas Mortgage Rates Continue to Improve

For the fourth day in a row, Las Vegas mortgage rates continue to improve.  They are still close to their highest level in a few years but they are still low from a historical perspective and they are definitely lower than they have been on a few other recent occasions, including the end of last week.  Las Vegas mortgage rates are also low relative to what they will probably be over the next year as the tapering of the Quantitative Easing program #3 will begin soon and as that program winds down, there will be less support for bond prices (to the tune of about $45 billion per month when the program ends completely) which means higher rates as bond prices fall.

The message to prospective buyers should be two-fold:  1)  Buy now.  Home prices and rates aren't getting any lower.  Experts forecast prices to increase 10-12% over the next year and for rates to be about 1% higher over that same time period.  This means that a buyer won't be able to afford as much home and that the cost of a home he can afford would have been much cheaper in overall price and monthly payment now than a year from now.  2) If a buyer isn't going to buy now for some reason, that buyer should at least consider taking advantage of our Lock and Look program.  This program allows a buyer to lock in current rates for up to a year while they shop around for a home.  If by chance rates happen to be better than what they locked at, we can float down to current rates but if they go up as I expect they will, the buyer is protected on the rate side; too bad the only way they can lock in today's price is to buy TODAY.

Data will continue to be the driving force for Las Vegas mortgage rates and when the Fed finally decides to begin the tapering process.  This morning we had two data points that should have had a negative impact on rates:  Consumer confidence came in higher than expected and last month's number was adjusted higher as well.  Additionally the Richmond Manufacturing index did an about face from -11 last month to +14 this month.  Both of these should have sent the benchmark bond down in price which would mean higher interest rates.  However, the unrest in Syria and the debt ceiling issues of the US are providing good support for bond prices now.  Remember that bad news for the world means good news for interest rates as bonds are thought of as safe haven investments which means as investors move from stocks and other "riskier" investments to the safety of bonds, bond prices increase and the rate goes down.

Mortgage Bond Chart:

Bond prices have come off their highs because of the economic data from this morning but they are still currently up 18 basis points for the day as of this very minute.  My advice is to float with caution (and use me to handle your client's mortgage).  Watch rates and economic news closely because there are a number of things that could turn the market on a dime and you or your client could miss out on the recent gains.  Please feel free to share and comment.  Please also subscribe to my YouTube channel (www.YouTube.com/TheWunderliTeam) where I provide video updates every Monday and Friday along with bonus videos regarding new loan programs and guidelines as well as marketing strategies.  Make today great!