On the rise?

WEIGHING OPTIONS Whether to sit tight or take the plunge and refinance is often a tough decision. 

Prior to the election on Nov. 8, we had seen a slow but steady rise in mortgage interest rates. Many attributed this to the fact that the markets were being conservative prior to the election, and that the Federal Reserve had indicated a rise in short term rates in December was a given.
You may have seen the news during the election of stock futures tanking and what appeared to be a disastrous day after for the markets, but the opposite actually happened. The stock market rallied, and proceeded to have an amazing six-day run.
Normally, when the economy is doing well, it does not bode well for mortgage rates. And sure enough, over the past week we have seen mortgage rates rise significantly. This means we will see a slowdown in refinance activity as families re-adjust and determine if it makes sense to refinance at this time.
Will rates continue to rise? The reality is there is no crystal ball and many of the economic indicators we used to count on no longer provide direction like they used to. If you are in the process of buying or refinancing, the conservative approach is if you see a rate you like that suits your budget, you would attempt to lock in. More aggressive or risk-averse families might take a wait-and-see approach, hoping to regain some lost ground.
Jayson Stebbins is a 23-year veteran of the mortgage banking industry. Contact him at (408) 825-0220 or at stebbinsmortgageteam.com.

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