Mortgage Rates May Continue to Rise
I’ve become slightly addicted to checking out bankrate.com’s mortgage rate trend index each Thursday. Each week bankrate provides expert predictions on the rise or fall of mortgage rates. A few weeks ago my husband and I finally agreed that rates were low enough to refinance the mortgage. We knew that rates could fall further, but historically they were close to the bottom, so we decided to jump in with both feet. In the end, we decided that rates may fall further but we also realized that the sooner we refinanced the sooner we would start saving ourselves from extraneous interest.
For now it seems our decision was a wise one. We locked in on a 4.75% 15 year fixed mortgage. Rates have been slowing rising since the day we locked and today our credit union is offering rates of 5.125%.
Bankrate.com’s expert panel is predicting a continued rise in rates over the next 35 to 45 days primarily due to economic stimulus. Here are a few comments explaining why rates may rise:
After enjoying a great run of mortgage rates coming down, it seems the past seven days have put an end to the party. The stock market is gaining momentum, and fueled by the announcement today that famed investor Warren Buffett of Berkshire Hathaway made an offer to reinsure $800 billion in municipal bonds, mortgage bonds (different than municipal bonds) are suffering. Result: Rates are higher. We will continue to watch the stock market for where rates are heading, but all indicators point higher as of today.
Ryan Kennelly, mortgage banker, Indymac Bank, Bedford, N.H.
Looks for rates to continue to drift higher in the face of economic stimulus and probable additional rate drops from the Federal Reserve.
Jim Sahnger, mortgage consultant, Palm Beach Financial Network, Stuart, Fla.
The stimulus package will create inflationary pressures. Mortgage rates will move higher as a result.
Dan Green, mortgage planner, Mobium Mortgage, Chicago
Persistent economic worries will be offset by inflation concerns and the amount of stimulus — both monetary and fiscal — currently in the pipeline.
Greg McBride, CFA, senior financial analyst, Bankrate.com
To read all of the panel’s comments click here.