The 30 year fixed conforming rate hit its low point a few weeks ago at 3.250%.  If you did not pull the trigger on locking in at that time and wished you had, we currently have a 10 year ARM as low as 2.99% (3.124% APR) that gives you another opportunity at an incredibly low rate that stays fixed for 10 years.  The loan is amortized over 30 years just like a 30 year fixed.  When you consider that the average mortgage is outstanding for less than 7 years, this option is an outstanding value alternative to the 30 year fixed.  Additional value comes in the way of  $20,000 guaranteed savings in the first 10 years (vs a 30 year fixed current rate of 3.875% / 4.00% APR on $250,000 loan amount).  Give us a call and we’ll be happy to  go over the details.

Link to this article for more insight as to why interest rates have been rising and why they are expected to continue to rise:

http://money.cnn.com/2013/06/06/real_estate/mortgage-rates/index.html

Ah yes, the $64,000 question!  Rates steadily rose throughout May (30 year fixed rose from 3.25% at the beginning of May to 3.75% currently) and many folks who did not take advantage of the lowest rates of course want to know if they will come back down.

Rates are at their highest since April of last year.  Rates did drop from these levels a year ago (feeding the refi frenzy of the second half of 2012), so many folks naturally think rates will drop again from these levels.  But there is a fundamental difference between now and a year ago.  Rates dropped last year because the economy (particularly real estate) was still struggling and the Fed kicked off additional stimulus (daily purchases of residential mortgage securities).  This stimulus was the primary driver behind lower rates in the second half of 2012.  The current situation is the exact opposite:  rates are rising because the economy is improving (particularly real estate) and the Fed has announced that it will begin tapering the stimulus this summer.  The anticipated end to this artificial cap on mortgage rates means that rates will continue to rise throughout the rest of the year unfortunately.