Where Are Mortgage Rates Headed in 2008? (And How Do They Affect San Francisco Real Estate?)

The beginning of the year brought us some declines on the mortgage scene - along with the addition of the strange new agency jumbo loan which covers the area between the traditional conforming loan of up to $417K but below a "real" jumbo loan which starts at $729K. Interest rates are historically low and while they're expected to stay that way through 2008, they are expected to creep upward as the year progresses. From The Real Esate Daily News:

Mortgage Rates Hit Low Point The 30-year fixed rate mortgage currently sits at 5.88 percent, and analysts say they are unlikely to fall any further for the rest of the year. The rate on the fixed loans is only down a quarter of a point this year, as the credit markets have cut the link between it and yields on 10-year Treasuries; and while skittish investors have moved to Treasuries to trim the yields, mortgage lenders have not eased lending standards. Mortgage rates are likely to close 2008 at about 6 percent as investors in bonds focus on rising inflation, driving interest rates higher. Long-term rates will also increase due to the additional supply of Treasuries as Congress borrows to raise money for the growing federal budget deficit.

That's great news for people that are ready to buy San Francisco real estate right now - the rates are slowly creeping up, and if you don't wait too long to buy, you can still take advantage of the great rates out there. That's also not horrible news for people waiting a bit - yes, interest rates will be higher by the end of the year, but not drastically. If you can't afford to buy just now, or aren't able to for another reason - you will still fall likely take advantage of historically low interest rates, they just won't as low as they are today. If you need advice about whether the interest rates make "now" a good time for you to buy, contact me. I'm always happy to talk about SF real estate! :-)