The Mortgage Bankers Association is predicting the mortgage rates will rise modestly in 2011 from ‘records lows in the low 4% range to merely historic lows in the low 5% range. The rise in rates will likely mean a lower level of new mortgages due primarily to fewer refinances, however the MBA expects new mortgages for purchases to rise back to 2009 levels after dropping 8% this year.
In our opinion, this good bad news – sure, we’d all like to have low rates all the time, however higher rates are a sign of stronger economy and housing market, and modestly higher rates won’t have a huge effect on keeping Buyers from buying which is what we need. I can’t wait to see someone complain about their 5% rate to someone who had a 11-14% mortgage 25-30 years ago.
Want the full article – click here. Thanks to the Wall Street Journal.