There are many factors that determine whether mortgage rates will rise or fall. It is impossible to get a definitive answer on whether it will go up or down, but to understand why rates change, you can get a feel for the direction they are moving.
There are many factors that determine mortgage rates. The money from the mortgage comes from the investors. These investors choose to invest in mortgage securities for security and return on their money. If the mortgage market makes it unstable, which in recent times, it can scare investors away. Another reason that people can choose an investment, except for mortgage securities is the amount of refund due to receive on their investment. When people decide to invest in other products, can reduce the amount of money available for mortgages, driving rates higher.
On the other hand, if the rate on other investment products are low, mortgage backed securities were an attractive choice. U.S. Treasuries are an attractive investment option for many people who normally may invest in mortgage backed securities, but the interest rates on them can drop so low that it is not worth investors that their money tied up in them.
While investors are an important part of the equation mortgage rates, they are not only part of it. If the housing market was booming and home sales are brisk, the demand for mortgage money increases, and rates will start to creep up. If the housing market in decline, and there is little demand for mortgage money available, interest rates will inch downward.
