When Will Record Low Mortgage Rates End?
According to the Mortgage Bankers Associations' Economic Forecast, these record low interest rates will end within the next few months, with rates to jump back over 5% by the end of 2011.
Here are the top predictions:
- 30 year fixed mortgage rate will average 4.4% in the fourth quarter of 2010.
- Rates will increase to 4.7% in the first quarter of 2011.
- Rates will climb to 5.1% by the end of 2011.
Mortgage purchases are anticipated to increase. According to predictions, the mortgage industry is expected to originate an annual $480 billion in purchase mortgages by the end of this year and $626 billion next year, an increase of 30%.
The group also predicted sales of existing homes, on a NATIONAL level.
- Sales of existing homes are predicted to be down 8% in 2010 from 2009.
- Existing home sales are anticipated to increase 2% in 2011.
- Existing home sales will then increase significantly in 2012, by 16%.
New Home sales are predicted to rise even faster.
- Sales of new homes are predicted to finish 2010 about 13% lower than in 2009.
- Sales of new homes are predicted to rise 20% in 2011
- Sales of new homes in 2012 are anticipated at 40% higher than in 2012.
Incredibly low interest rates have made homes more affordable than ever before. Buyers of new homes are interested in low maintanence homes with full warranties, significant energy savings, and workable floor plans.
The predictions may not be entirely accurate, but one thing's for sure - these record low rates WILL NOT LAST FOREVER.
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