mortgage financing and programs

Archive for February, 2010

Mortgage Rates Forecast

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Mortgage Rates have been hovering at near record lows for the better part of the past year. All time low rates were reached in April of 2009 then increased gradually through the Summer of 2009 before retreating in the Fall and reaching a new record low once again in December. Since that time little has changed. The average 30-year fixed mortgage rate has remained south of 5%. The question home buyers are asking is how long will rates stay low? For the short term rates probably will not change significantly. Recent economical reports have been mixed. There just has not been a clear indication that the economic recovery has completely gotten over the hump. The monetary policy of the Federal Reserve has been to keep rates down while the economy pulls out of this recession. The Fed has been able to do that by keeping discount rates low and by spending $1.2 trillion in mortgage backed securities. The Fed is expected to complete this spending program at the end of March. Afterwards expect rates to begin rising. Concerns over inflation may also cause the Fed to increase discount rates later this year. Don’t expect sub 5% rates for much longer.

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