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Rates Are Almost Certain to Go Up -- But How High?
There is consensus among housing experts and economists that mortgage rates will go up markedly this year, leaving behind the historic five-percent-and-below levels that homebuyers have enjoyed for over a year. The prediction is rooted in the fact that the federal government will end the trillion-dollar program to buy mortgage-backed securities that pushed rates down so low at some point in late spring or early summer.
So, barring an unanticipated extension of the program, the question is not if rates will rise, but by how much.
The San Francisco Chronicle just ran an article in which a number of experts were surveyed for their predictions, which ranged from 50 to 200 basis points, putting the resulting rate between 5.5 and 7 percent.
At today’s 4.875 percent, a $200,000 mortgage costs $1,058 per month. If rates rose to 5.5 percent, that monthly expense would rise $78 to $1,136. If rates rose all the way to 7 percent, the monthly cost would go up $273 to $1,331.
What’s your prediction? Where do you think rates will be at the end of 2010?
See other articles related to: dc area market trends, dclofts, mortgage rates
This article originally published at https://dc.urbanturf.com/articles/blog/rates_are_almost_certain_to_go_up_--_but_how_high/1789.
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