A look at where rates on home loans are headed in the new year.
A question I'm hearing a lot lately is "where are interest rates going this year?" This US News & World Report article puts the complexities of the mortgage markets in simple, easy to understand language.
BOTTOM LINE- the article says ", they will "wax and wane" in the 5.5% to 6% range, before closing out the year somewhere between 6% and 6.25%."
Here's a quick summary of the 7 points:
1. 2009 rate outlook: "There is no reason to think that rates are going to go up so substantially so as to erode the marketplace." (However, should the economic outlook improve more quickly than expected, mortgage rates could trend higher, Gumbinger says. In addition, new government programs unveiled next year could alter the projection.)
2. Inflationary easing: With the global economy headed for what many expect to be a nasty recession, the inflationary pressures that looked so menacing in the summer have quickly dissipated.
3. Recession: The National Bureau of Economic Research recently announced that the United States did indeed enter a recession in December 2007.
4. Government action: The outlook for mortgage rates has also been influenced by recently announced government initiatives. In late November, the Federal Reserve announced plans to buy up hundreds of billions of dollars in debt and mortgage-backed securities from government-controlled mortgage finance giants Fannie Mae and Freddie Mac. The plan is designed to reduce Fannie's and Freddie's financing costs, thereby enabling them to pass savings on to individuals in the form of lower mortgage rates.
5. Housing market turmoil: The decline in home prices, coupled with rising mortgage delinquencies and foreclosures, has prompted investors to demand higher returns on their investments in securities backed by home loans.
6. Lending standards: Although mortgage rates are likely to remain attractive next year, not everyone will be able to take advantage of them.
7. No rush: But even though rates may be low today, Larson says qualified borrowers shouldn't feel pressured to see their lender immediately.
Provided by:
Debra Gravelle
Moses Lake Realty Group
537 W. Broadway
Moses Lake, WA 98837
509-771-9099
http://www.grantcountyproperties.com
Certified Negotiation Expert
Comments(0)