Correspondent Mortgage Lending
Mortgage Rates expected to rise in 2010
Fannie Mae (fanniemae.com) and the Mortgage Bankers Association (mbaa.org) published economic forecasts in August 2009 indicating rising prices.
Under Fannie Mae's outlook that is 30 years fixed rate is expected to increase from the current quarter of 2009 to late 2010, with mortgage rates eventually reach 6% or more.
Also, the 10-year Treasury note was commonly used as a barometer of the direction interest rates mortgage, and based on their economic forecasts for the 10-year Treasury rate, which is an indication of a similar upward trend in mortgage rate rises come at a steady pace per quarter, which could amount to an increase of 1% or more by the end of 2010.
If forecasts prove correct, the 30 years fixed rates rise to 6% or higher by the third or fourth quarter of 2010. Rising mortgage rates could slow demand for the purchase of homes and mortgage refinancing. The number of qualified borrowers can be reduced, slowing the housing market, and homeowners with adjustable loans may see payment increases, which contributes to the risk of more defaults.
The information appears to be credible given the source: Fannie Mae is a government sponsored enterprise chartered by Congress with a mission to provide liquidity, stability and price to the U.S. housing and mortgage markets. The Mortgage Bankers Association is a nationwide association representing the real estate finance industry, including mortgage lenders, mortgage brokers, commercial banks, life insurers and others in the mortgage lending field.
The following quote applies predictions "Predictions are difficult, especially about the future" but in light of this information, those who have sat on the fence waiting for mortgage rates to come down might want to rethink their strategy.
About the Author
Written by Rick Smith Current mortgage rates, home loans and refinance, and information on Carlsbad new homes