Mortgage refinancing in 2009 will be almost 1 1/2 times greater than in 2008, showing the first increase in four years.  Refinance activity has driven a 62% increase in total mortgages to $2.62 trillion in 2009. Mortgage rates remain low, despite an increase in Treasury yields, but this may not last.

What It Means to You

The Federal Reserve has bought one third of Treasury bonds since March. This commitment has kept yields from climbing higher.  These yields are what mortgage interest rates are based upon. Yields go up when the government sells a lot of bonds to increase demand for the bonds.   Government stimulus spending will probably cause Treasury rates to move higher later this year. If you have a high risk loan, it may make sense to lock in a low fixed-rate loan now. Talk to a qualified mortgage broker to determine if it makes sense in your particular circumstance. (Source: Mortgage Brokers Association, Trough Is Near, May 14, 2009)

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