Yes, the good ole days have come and gone again…..but could this actually help the housing industry? Some experts think it will by providing a sense of urgency to the buyers sitting on the fence. Read more below.
Kiss 4% mortgage rates goodbye
NEW YORK – Jan. 4, 2011 – The era of near 4 percent mortgage rates has ended after a quick rate rise since early November. However, some industry experts think that may be a good thing for the flagging housing market.
The average 30-year fixed mortgage rate has risen to 4.86 percent from 4.17 percent, according to Freddie Mac’s weekly mortgage market survey. In the Bankrate.com weekly survey, the rate has risen to 5.02 percent after being as low as 4.42 percent in early November. Forecasters now predict rates will remain between 5 percent and 6 percent for all of 2011.
“You can kiss those record lows goodbye,” says Greg McBride, chief economist for Bankrate.com.
Higher interest rates may actually prove stimulating to the still quiet housing market in which sales volume and prices are scraping near their bottoms, however.
“The initial phase of an interest rate increase generally does not hurt markets,” says Lawrence Yun, chief economist for the National Association of Realtors. “In fact, it can help.” Yun says the rapid rise introduces an element of urgency for potential homebuyers, who may now rush to buy before rates spurt even more.
Source: CNN Money (01/01/11) Christie, Les
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