Mortgage Rates Predicted to Rise in 2010
Fannie Mae (fanniemae.com) and the Mortgage Bankers Association (mbaa.org) published economic forecasts in August 2009 that indicate rising rates.
According to Fannie Mae’s forecast, 30 year fixed rates are predicted to increase from the current quarter of 2009 through the end of 2010, with mortgage rates eventually reaching 6% or more.
Also, the 10-Year Treasury Note has been commonly used as a barometer of the direction of mortgage rates, and based on their economic forecasts of the 10-Year Treasury Rate, there is an indication of a corresponding upward trend in mortgage rate increases coming at a steady pace per quarter, which could amount to an increase of 1% or more by the end of 2010.
If the forecasts turn out to be accurate, the 30 year fixed rates may increase to 6% or higher by the third or fourth quarter of 2010. Rising mortgage rates could slow demand for buying homes and mortgage refinancing. The number of qualified borrowers may be reduced, slowing the housing market, and homeowners with adjustable loans could see payment increases, adding to the risk of more defaults.
The information appears to be credible, considering the sources: Fannie Mae is a government sponsored enterprise chartered by Congress with a mission to provide liquidity, stability and affordability to the U.S. housing and mortgage markets. The Mortgage Bankers Association is a national organization that represents the real estate finance industry, including mortgage companies, mortgage brokers, commercial banks, life insurance companies and others in the mortgage lending field.
The following quote applies to forecasts “Predictions are difficult, especially about the future”, but in light of this information, those who have been sitting on the fence waiting for mortgage rates to come down may want to reconsider their strategy.
According to Fannie Mae’s forecast, 30 year fixed rates are predicted to increase from the current quarter of 2009 through the end of 2010, with mortgage rates eventually reaching 6% or more.
Also, the 10-Year Treasury Note has been commonly used as a barometer of the direction of mortgage rates, and based on their economic forecasts of the 10-Year Treasury Rate, there is an indication of a corresponding upward trend in mortgage rate increases coming at a steady pace per quarter, which could amount to an increase of 1% or more by the end of 2010.
If the forecasts turn out to be accurate, the 30 year fixed rates may increase to 6% or higher by the third or fourth quarter of 2010. Rising mortgage rates could slow demand for buying homes and mortgage refinancing. The number of qualified borrowers may be reduced, slowing the housing market, and homeowners with adjustable loans could see payment increases, adding to the risk of more defaults.
The information appears to be credible, considering the sources: Fannie Mae is a government sponsored enterprise chartered by Congress with a mission to provide liquidity, stability and affordability to the U.S. housing and mortgage markets. The Mortgage Bankers Association is a national organization that represents the real estate finance industry, including mortgage companies, mortgage brokers, commercial banks, life insurance companies and others in the mortgage lending field.
The following quote applies to forecasts “Predictions are difficult, especially about the future”, but in light of this information, those who have been sitting on the fence waiting for mortgage rates to come down may want to reconsider their strategy.
