Almost every mortgage expert predicted that interest rates would skyrocket earlier this year as the Fed backed out of purchasing mortgage-backed-securities. They were wrong and most have refrained from making any new projections ever since. Last week, our own friend and adviser, Dean Hartman, said they may go lower. This week, Market Watch reported on the Mortgage Brokers’ Association’s (MBA) projections:
Mortgage rates may be as low as they’ll get — rates are on course to rise, slowly moving toward 5% by the end of next year, according to the Mortgage Bankers Association’s economic forecast.
It seems that the MBA is in line with the projections of the National Association of Realtors who also believes that rates will increase over the next several quarters. Here are the comparative projections:
NAR MBA
2011 2nd Qtr. 4.7 4.8
2011 3rd Qtr. 5.1 5.0
2011 4th Qtr. 5.4 5.1
2012 1st Qtr. 5.6 5.2
2012 2nd Qtr. 5.8 5.4
Bottom Line
If you are thinking about buying a home but are waiting for prices to soften further, be careful that the ‘cost’ of the house isn’t heading upward because of interest rates.
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