There is no argument to be made that mortgage interest rates are higher in 2014. While there may be some banks and lending institutions that are offering the 30 year fixed rate under 4% most borrowers are finding 30 year rates as high as 4.5%. On Zillow.com reports show that Raleigh, North Carolina mortgage interest rates peaked at 4.5% around January 18th, 2014. Since then, the average 30 year fixed rate has stabilized between 4% and 4.5%. This should come as no surprise as the 10 year treasury rate yield has stabilized as well.
Since the beginning of 2014 the 10 year yield has moved much lower. On the first trading day of 2014 the 10 year yield was right at 3%. After that, it has been a steady move lower. On April 7th the 10 year yield moved below its 50 day moving average for the first time in several months. On that same day, the 10 year dropped below its 200 day moving average as well. Investors know that any move below the 200 day moving average and it is bear territory. After moving below the 200 day moving average the 10 year yield has moved sideways to down. As of June 29th, 2014 the 10 year yield is at 2.53% and both the 50 and 200 day moving averages are moving down. This is definite bear territory for any technical investor.
Homeowners in Raleigh, North Carolina have seen home prices move up since the bottom in March of 2009. Along with home prices moving higher, many of these homeowners have been able to refinance to historically lower mortgage interest rates. If a homeowner can save one full percentage point on their current home loan rate it behooves them to go through the process and refinance today. Mortgage lenders like Bank of America, Wells Fargo, Citigroup and JP Morgan Chase have all seen their balance sheets improve since the bottom after the mortgage crisis so more and more homeowners are not only able to get a home loan but they are able to finance it at a very low rate.
Moving forward, it will be interesting to see what happens with the 10 year treasury rate yield. If the 10 year yield finds resistance at both the 50 and 200 day moving averages 30 year fixed mortgage rates will stay historically low. If the 10 year yield starts to move above the 200 day moving average homeowners can expect to see interest rates moving back towards the 4.5% mark that we saw in January of 2014.