You could possibly pay more to buy or refinance a home in 2011, says a recent New York Times article. Rates for thirty-year, fixed-rate mortgages, the most common type of home loan, have risen steadily since their lowest point in mid-November, 2010.
According to Freddie Mac, rates on December 16 were at around 4.80 percent, up from 4.17 percent in early November, but still significantly lower than the 5.21 percent of April 2010.
Some experts think the current increase could be caused in part by rising interest rates on government Treasury and other bonds, which mortgage rates tend to follow. Treasury rates are rising on fears of inflation, the rising budget deficit, and nervousness over the effects of unemployment on the economy.
However, some are downplaying this increase as temporary. One Freddie Mac economist believes that 30-year fixed rate loans will stay below 5 percent in 2011, and still others think the rates will drop again in the next 60 days.
Compared with the 6 to 8 percent interest rates over the past decade, the current rates still make it affordable to refinance or buy—and there was great demand for refinancing in 2010, with more to come in 2011. What may make it harder are tighter requirements from lenders and the still-depressed real estate market.
According to Freddie Mac, rates on December 16 were at around 4.80 percent, up from 4.17 percent in early November, but still significantly lower than the 5.21 percent of April 2010.
Some experts think the current increase could be caused in part by rising interest rates on government Treasury and other bonds, which mortgage rates tend to follow. Treasury rates are rising on fears of inflation, the rising budget deficit, and nervousness over the effects of unemployment on the economy.
However, some are downplaying this increase as temporary. One Freddie Mac economist believes that 30-year fixed rate loans will stay below 5 percent in 2011, and still others think the rates will drop again in the next 60 days.
Compared with the 6 to 8 percent interest rates over the past decade, the current rates still make it affordable to refinance or buy—and there was great demand for refinancing in 2010, with more to come in 2011. What may make it harder are tighter requirements from lenders and the still-depressed real estate market.
Your best bet is to stay aware of the rate changes, but don’t over-analyze. It’s tough to hit a bull’s-eye on a constantly moving target, so try not to worry if the rate drops after you’ve locked in. It could very well have risen instead. Make the jump when it works best for your budget and then enjoy your home.
Contact me today for expert help buying or selling in the DC, MD, & VA area!
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