Rates improve slightly this week - NOW is your buying opportunity!

By
Real Estate Agent with LoanCentral

The recent unrest in the Middle East is causing investors around the world to move money to the safe‐haven of US bonds, causing bond prices to increase, and resulting in lower mortgage rates. While we've seen slight improvements in the mortgage rates this week, they haven't dropped nearly as much as many analysts expected.

This is especially surprising when you consider the stock market dropped 325 points in addition to the bond market increases. However, many experts are warning that the recent gains in bonds will be limited by fears of inflation down the road.

Therefore,In addition, the improvements in rates are likely to be temporary and may not last for long. as the economy continues to expand, albeit slowly, rates will move higher over time.

Many are predicting mortgage rates to be around 5.5% toward the end of 2011. This week's small downturn in rates provides an excellent opportunity to lock in your rate before they go back up. For those who are waiting to see if housing prices drop further,

you should know this fact: a 5% drop in the price of a $400,000 home is completely offset by a 1% increase in interest rates. Now is the time to buy...housing prices are great and rates are still low!

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 Chart showing your loss of buying power when rates increase

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