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Why Are Mortgage Rates Rising And Will They Stop?

By Stacy Williams

Economic Slow Down

Beginning 2007 the economy has seen some of the lowest economic growth rates and although most experts had touted 2010 as the year of economic resurgence this is not the case.

Investors

Why are mortgage rates rising and will they stop? They are rising Because no matter how much the Federal Reserve cuts interest rates the risk of low interest rates is very real. This will keep investors away from the mortgage market and in turn keep lending rates high.

Why Are Mortgage Rates Rising And Will They Stop?

Mortgage rates are rising because of the fear of inflation. As long as the economy continues to experience slow or even negative growth inflation will continue to threaten having a direct impact on the mortgage rate. The Federal Reserve chairman has reacted by altering interest rates in order to stabilize the economy but the mortgage rates have kept rising steadily over the past few months. A 30 year mortgage that was available at an interest rate of 5.25% in April has increased by a whole point and this trend seems set to continue.

Freddie Mac and Fannie Mae

Why are mortgage rates rising and will they stop? This is highly unlikely because once the money used to save these two giants is over the growing debt must be catered for.

Demand is Greater Than Supply

Despite the harsh economic climate the number of consumers interested in purchasing homes continues to escalate. In conclusion in order to answer he question why are mortgage rates rising and will they stop? IT is simply because the economy is on a go slow but the demand for housing continues to increase.

Related posts:

1. Will Rising Mortgage Interest Rates Stop Housing Recovery?
2. Why are mortgage rates rising now?
3. Are Mortgage Rates Rising Now?
4. How Does Inflation Affect Mortgage Interest Rates?
5. Inflation Affects Mortgage Interest Rates In What Ways?