With all the turmoil of the European markets, investors are putting their money in U.S. Treasuries which is what the home loan market is tied to. We have been expecting an increase in mortgage rates as the government has indicated it will no longer articifically keep rates low to spur housing purchases. However, in recent weeks, the Euro is under attack and many investors are nervous about an all out collapse.

"The angst of investors around the globe about European debt, slower growth in China, and saber-rattling on the Korean Peninsula all feed into what is known as the ‘fear trade,’” Bankrate said in its report. “That fear trade has helped bring yields on U.S. Treasury securities considerably lower and mortgage shoppers have been direct beneficiaries.”

This could be a extraordinary time to purchase a home and get an interest rate of five percent or lower! Rule of thumb, each time interest rates rise or fall one percent, then payment adjusts one 19 percent! Interest rates are expected to reach six percent this year or by end of year. So jump in now or pay 19 percent higher payment when you do decide to buy.