Mortgage Rates to Rise - RJ Baxter First Mortgage Corp Evergreen, Colorado
Experts have been talking about it for months, and the scenario seems to be coming into play- It is likely that mortgage rates will rise in 2010.
A number of factors are leading to this. For one, the Federal Reserve's mortgage backed security purchase program is set to expire in March. We have already seen a slight rise in rates over the past month as the Fed has scaled back their purchases recently.
Additionally, signs that the economy is improving and the release of positive economic data are negatives for low mortgage rate fans, as is a stronger economy. Both of these factors could mean mortgage rates will rise in 2010.
But the worst factor that has yet to come to fruition is inflation. Inflation is the arch-enemy of long term interest rates because inflation erodes the value of long term securities. It's not a matter of if inflation returns, it's when and how bad it will get.
It's unlikely we will see a scenario unfold like in the 1980's, but the right factors are in place for significantly higher rates in the coming years. Bottom line- it is ineveitable that mortgage rates will rise in 2010.
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