Interest Rates on the Rise
The 30 Year Fixed Rate continues its steady rise through the month of January and now sits at roughly 1 percent higher than the "bottom" rate of last summer. The Fannie Mae 3o Year Fixed is now at approximately 5.25%. Depending on credit and equity, adjustments will apply. As seen in the FNMA graph of the Fannie Mae Coupon the rate has steadily increased since November, 2010 - having risen a full point since then. (http://www.bloomberg.com/apps/quote?ticker=MTGEFNCL:IND). Most economists had predicted a slower increase over the course of 2011, but market forces have pushed rates up faster than expected. Capital markets have shown large increases, including the US stock market and precious metals. This has forced bond markets to charge lower prices in competition for the same dollars. Lower bond prices equate to a higher interest rate yield to investors.
Locking in mortgage rates asap is advisable. Especially if a "float down" option is offered by the lender, such as Wells Fargo. A float down option offers an "insurance" to the borrower in the event that rates take an unexpected reduction. In this way, the consumer / borrower gets the protection from rising rates, while maintaining the peace of mind that a "float-down" offers.