By Fred Solomon
Rates have increased 0.375% – 0.5% off of their 2021 all-time historic lows (which was about 60+ days ago). The Fed has already begun their tapering of buying bonds which means, the fewer bonds they buy, the faster the interest rates will go up. To stay up to date on what is happening with current rates, watch the inflation (year-over-year analysis) and the employment numbers (which come out the 1st Friday of every month) along with the Fed tapering and their repurchase numbers on the treasuries and there’s your answer on how soon they will increase!
The Fed has already promised us 3 short-term interest rate hikes in 2022. But, that doesn’t necessarily mean that long-term rates will be affected by that.
Long-term interest rates are based on inflationary/unemployment numbers. The Fed comfort zone for inflation is 2 to 4% annual growth. The most recent inflation numbers showed 5.7% annual growth in November which is the estimated inflation since July, 1982.
It looks like it is going to be cash out re-financing and purchase business in 2022 for us mortgage peeps! Refi’s are dead except for the next few months and people who need or want to cash out.
I believe we will see approximately 3/4% higher mortgage rates in 2022 (very similar to the short term interest rate increases – assuming a 1/4% rate hike each time the Fed raises short term rates in 2022)!
If you’re thinking about taking any cash out for home improvement or whatever, do it before the Fed starts raising rates (long term rates do go up because of the reaction in the bond market to the Fed short term interest rate increase). You have been notified!
To discuss whether it makes sense to re-fi, your 1st mortgage, or just get a HELOC (Home Equity Line of Credit) instead, we have a combined rate mortgage calculator to help figure it all out – www.nopointsnoclosingcosts.com/ratecalc.php
We specialize in TRUE Zero Cost loans, have been advertising that on the radio since May 2001 and have been serving clients since 1990!
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