Where are interest rates headed?
Happy Tuesday morning to YOU!
Lots in the news about the interest rate rollercoaster. Here's what you need to know:
Today’s $20,000 question is…Where are mortgage rates headed in the near future? Most believe the rapid rise in rates experienced over the last month will not be sustained and that they will level off into a range between 4% and 5%.
When recently asked, Zillow’s director of Mortgage Marketplace, Erin Lantz suggested:
~“It is impossible to predict. However, we expect there to be a lot of volatility, probably between 4.5% to 5%.”
In Bankrate.com’s Mortgage Rate Trend Index last week, 20% of the experts said rates would go up this week, 30% said rates would go down and 50% said they would remain unchanged.
What about going forward?
Doug Duncan, chief economist for Fannie Mae recently addressed where mortgage rates may eventually end up:
~“I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.”
Why wouldn’t the Fed be troubled? They have artificially kept rates low in order to stimulate the economy. As economic indicators begin to show signs of a recovery, the stimulus will be pulled back and rates will rise.
Frank Nothaft, Freddie Mac’s VP and chief economist confirms this:
~“As the economy continues to improve, we expect to see continued upward movement in long-term interest rates.”
Buckle in!! The rollercoaster ride will probably continue.
We hope you get some Summit County mountain time this summer. As one of my friends recently said, "The heat wave here in the mountains is killing me! It got up to a blistering 76 degrees yesterday!" :-)