Feed: Mortgage Rates Predicted to Continue Upward Climb - AggScore: 10.5
Summary: Mortgage Rates Predicted to Continue Upward Climb
Martin Lukac asked: Mortgage rates could hit 7% or higher, according to economists. With the 17th consecutive boost in benchmark short-term interest rates by the Federal Reserve last week, the ripple could be felt in the mortgage industry before long.In fact, rates have risen in anticipation of the Fed’s actions. The ripple will extend into [...]
Mortgage Rates Predicted to Continue Upward Climb
div stylefloatleft padding 12pxa hrefwpcontentuploads201011mortage41.jpgimg srcwpcontentuploads201011mortage41.jpg title alt adivdivemstrongMartin Lukacastrong asked embrbrbrbrbrMortgage rates could hit 7 or higher, according to economists. With the 17th consecutive boost in benchmark shortterm interest rates by the Federal Reserve last week, the ripple could be felt in the mortgage industry before long.brbrIn fact, rates have risen in anticipation of the Feds actions. The ripple will extend into higher interest rates on credit cards and home equity loans.brbrWhile the Fed has no direct control over the mortgage industry, mortgage rates have been moving higher. Freddie Mac reported last week that the national average for a 30year fixedrate mortgage has risen to 6.78 the highest level since May 2002.brbrBorrowers with adjustablerate mortgages will be more affected than those with fixedrates. For those just now considering adjustablerate mortgages, the benefits are much less than even one year ago. With the gap between fixedrates and adjustablerates narrowing, the overall savings of an adjustable rate is lessened drastically.brbrThe rising interest rates are intended to slow down consumer spending and other economic activities that indicate inflation. The economy has grown at the fastest pace in twoandahalf years in the first quarter of 2006. The housing sector is one area, though, where growth is slowing.brbrAfter the Feds increase on Thursday, the majority of US banks raised their prime rates to 8.25, up from 4 in 2004. That means that many homeowners with home equity lines of credit are paying 8.25 or more on the debt. Many experts expect to see many homeowners refinancing this debt back into a primary mortgage where rates remain slightly lower.brbrWeve been spoiled with such low rates over the past few years, said Scott Goodrich of Monterey Bay Mortgage. Peoples memories are short and young folks who have only experienced low rates, when they start seeing 7, that might have an impact.brbrDoreen Woo Ho, president of Wells Fargos consumer credit group says that consumers are realizing its more expensive to borrow money now.brbrWells Fargo and other lenders are now offering home equity lines of credit with initial fixedrate periods. This makes the repayment amount more predictable for a certain period of time.brbrDespite rising rates, Americans are still going to be buying homes and taking out equity lines of credit says Woo Ho.brbrWe certainly still have a healthy number of consumers who still see the need to borrow, she said.brbra hrefShirleyadiv
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