Here come the 2010 forecasts...

Mortgages rates, which hit an all-time low about a month ago, are slated to rise to six percent by the end of 2010, according to the deputy chief economist at mortgage financier Freddie Mac.

Amy Crew Cutts told the Washington Post mortgage rates could climb about a percentage point over the next year as the Fed winds down its mortgage securities purchase program.

She said private buyers of mortgage securities will demand a higher rate of return on the investments than that of the Federal Reserve, prompting banks and lenders to raise interest rates for consumer loans.

Last week, the always-hot 30-year fixed averaged 5.05 percent, up slightly from 4.94 percent a week earlier; but rates have increased for three consecutive weeks since hitting rock bottom.

And rates hadn't been above five percent since the last week of October, so there's fear the best may have come and gone.

It's been largely expected that mortgage rates will rise in 2010, given the current unprecedented levels and the amount of government involvement necessary to artificially deflate them.

Cutts added that anything below five percent on a mortgage is a "gift at this point," echoing similar sentiment from interim Freddie Mac CEO John A. Koskinen back in late March, who said mortgage rates were "about as attractive as they're ever going to be."

In other words, buy a house TODAY, before it's too late. But seriously, rates will probably move higher in 2010.

 

2 Comments on Here come the 2010 forecasts...

DEC
30
2009

Not good news to the many of thousands of new short sale/foreclosures coming on in 2010. Sounds like we are in a viscous circle that is not going to help the real estate industry.
10:06am • #1
SEP
11
2011

Looking back it certainly seemed like rates were at their lows but now, over a year later, it's hard to believe that rates have continued to fall and look likely to continue to do so. Hopefully, at some point they will reach a point where people just can no longer pass them up and our housing market will begin to truly recover.
6:46am • #2


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Chris McDonald

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