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Where Are Mortgage Rates Headed?

By Kevin Landis

Mortgage rates are low now, but will be rising in the next year! If you are waiting for the perfect time to buy – it’s right now!

If you are considering the purchase of a new home in the next year or two, then you should be paying close attention to the mortgage industry, and especially to the current and predicted mortgage interest rates. This is important, because mortgage rates have been on the rise for the last year, and when you are prepared to buy, you will need to know if now really the right time for you to buy.

The Recession is Ending, What Does this Mean to Consumers?

The Federal Reserve announced a few weeks ago that the recession is coming to an end. The job market is increasing in strength and economic activity is definitely experiencing a comeback over recent months.
The real estate industry has seen a small amount of improvement over this short time; however the progress is definitely slow as consumers are hesitant to engage in mortgage contracts with lenders who have demonstrated less than honest behaviors in the past. Although tighter regulations are in place, consumer trust has not rebounded.

How will the Government Help?

Over the past year, mortgage rates have been slowly increasing and are expected to rise at least another two percent over the next 12 months. The Fed has released statements that it wants to continue working with lenders to keep mortgage rates as low as possible, however. In an effort to do this, the government has purchased mortgage-backed securities from lenders including Freddie Mac, Fannie Mae and Ginnie Mae. The total of these securities was approximately $175 billion.

How High Will Rates Go?

Consumers should expect that this will help to keep mortgage rates from skyrocketing over the next year or two. In fact, it should be expected that the average rate for a 30-year fixed mortgage will go from the current 4.92% to around 6% in the next 24 months. But, for the coming year it is predicted that rates will hover in the 5% range and this is excellent news for buyers.

Related posts:

1. Where Will Current Mortgage Interest Rates Go?
2. Why Are Mortgage Interest Rates So Unstable?
3. Where Are Mortgage Interest Rates Headed And Why?
4. Where Are Mortgage Rates Headed In The Second Half 2010?
5. A Small Rise In Mortgage Rates Seen After Feds Back Down