If you are shopping for a home loan, you know that watching the rise and fall of mortgage rates can be a little nerve wracking. One week they seem to be heading up, then next week they head down. Should you lock in a rate now or wait and hope they might fall further? Unfortunately there are no guarantees in the mortgage rate game. All you can do is look at the current trends and hope to make an informed decision.
First we must look at a little history. If you consider the big picture of the last 25 years, things are looking good. The highest average rate of 18.45% in 1981 was enough to make anyone cringe. That was as high as most credit cards' interest rates! In the more recent time span of 1992 to today, the average rate for a 30-year fixed mortgage has stayed within the range of 9.25-5.25%. The lowest rates in recent history were in June of 2003. Since then, rates have followed a zigzag pattern up and down, but generally are trending slightly upwards. But overall, mortgage rates are still near their lowest in recent years.
This year, 30-year mortgage rates started out around 5.7%. After dipping to the yearly low of around 5.2% they have rebounded to the current level of 6%. The question is, will rates hold steady in this range or is this only the start of a longer rise? That is a topic on which whole volumes of books have been written. So now we must make our best estimate based on the current data. If you look at the current Federal Interest rate situation, new housing sales, and resale-housing inventory, most signs point to a rise in mortgage rates in the near term. How high, is speculation for anyone, but a survey of ""industry experts"" show that most expect to see mortgage rates at 6.75% sometime during 2006.
About the author: Jake Davis writes about various financial and consumer issues for a variety of online sources including his website http://www.newloanexpert.com
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