December 16, 2017

How Long Will Seattle Mortgage Rates Remain Low?

 

Wondering why interest rates have remained so steady?

 

Bottom line supply and demand.  The Feds purchase program is slowly ending and the amount of debt purchased per month has significantly decreased.  Current Treasury auctions taking place are for the months of July and August.  If you look back to July and August, the volume of loans closed during that time had significantly decreased.  Why?  Interest rates had increased.

 

The Feds decreased purchasing equals the decreased volume from July and August.

 

In September and October, rates improved to lower levels.  The volume has increased tremendously so Treasury auctions will increase and who is going to purchase the debt?  The Feds purchasing will continue BUT decline and eventually end.

 

The result is higher interest rates.




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