Are Mortgage Rates Headed for a Quick Move to 6.0%

Mortgage rates moved to the 5.25% range today. Michael Dunton, senior V.P. at Mt McKinley bank emails:

We are seeing the first 5.25% rate in recent memory. The bond market was open only a half day today, but the coincidence of this rate and the supposed conclusion of the MBS buying by the Fed is something to consider.

On 3-25 we were at 5.125%

3-18…….4.875

3-11……4.875

3-4…….4.875

2-1…..4.875

1-4…..5.125

12-1-09……..4.625

11-2……4.875

10-1……4.875

9-1…..5.125

7-31…..5.125

4-1-09……4.625


So I would say that the next week or so will determine whether this 5.25% is a blip or a harbinger of a more lasting upward push toward a 6.00%...

But, I just don’t see the Fed exiting the MBS market—too many things are affected by a 6.00% mortgage…..bank balance sheets, home values, etc.

Regardless, where interest rates are headed in the short-term, we are at the start of a long- climb in rates.If you haven't long in rates on your long-term borrowings by now, you better act quickly. The window on rates below 5.0% is closing.