Mortgage rates tend to be cyclic in nature, meaning they repeat over time. There are variances to these trends, which are linked to specific economic factors and influences, but in general, markets tend to correct themselves over time and fall back into familiar patterns. Once you understand mortgage rate trends, you will be able to discern what constitutes a good selling or buying market.

What Factors Influence Mortgage Rate Trends?

Mortgage rates follow trends that are dictated by repeating economic patterns. The following are three economic factors that specifically affect mortgage rate trends:

1.  Yield on the Ten-Year Treasury

Mortgage rates tend to follow whatever direction of the Ten-Year Treasury yield. This probably occurs because on average, mortgages are either paid off or refinanced by the time they hit the ten-year mark.

2.  Investors’ Risk Premiums

Investor activity (especially related to the buying and selling of mortgage-backed securities) affects mortgage rates.

3.  Economic Health of the Nation

When the economy is healthy, mortgage rates go up, and in times of economic distress, mortgage rates drop. Both lenders and the government try to act as buffers, but the overall mortgage rate trends are definitely linked to overarching national economic health.

How Can You Interpret Current Mortgage Rate Trends?

If you are considering buying or reselling, you will want to keep tabs on the current mortgage rates by clicking on this helpful mortgage rate tracker. If you’re interested in looking at long-term mortgage rate trends, check out these long-term mortgage rate history charts.

What Are the Experts Saying?

As of June 2011, most mortgage experts ware predicting interest rates would begin to rise. You can check out the latest predictions by visiting this mortgage rate prediction site to see what 250+ mortgage experts are collectively predicting. While nobody can predict what will happen with mortgage rates with complete accuracy, these experts specialize in distilling data related to the mortgage industry, and as such, offer reasonable interpretations of trends.

What Does This Mean For You?

How will the current mortgage rates affect you? Currently (June 2011), mortgage rates are at all-time lows. Because many mortgage experts are predicting rates will rise, now may be the best time to buy or refinance. Check out the following general rules:

When Rates Are Low, Refinancing Opportunities are Optimal

With interest rates dipping so low, it’s an ideal time for borrowers to refinance mortgages for lower rates. Even though you may have to pay closing costs (depending on what offers lenders can provide), you’ll save thousands over the life of the loan if you get a low enough interest rate. Compare your existing mortgage interest rate to the current available rates to see you potential savings.  To learn more about what factors affect your mortgage rate visit the Concise Guide to Mortgage Rates.

When Rates Are Low, First-Time Home Buyers Luck Out

If you’re a first-time homebuyer, you will find many homes that may have been out of reach before are available at low prices, and with interest rates so low, you’ll be able to afford more house for your money.

Overall Outlook For Real Estate

In general, the mortgage trends for the second half of 2011 are excellent for homebuyers and those who wish to refinance, but tough for sellers. If you already own a home, you may have to sell for a less-than-optimal price, but you may be able to get into a better home for a  low price accompanied by a mortgage with a low interest rate. If your new home and mortgage is a better deal than your original situation, you may come out ahead. Many homeowners are finding their dream homes are on the market for rock bottom prices, putting those dream homes within reach.