Where do you think mortgage rates will be in summer 2010?

Asked by Trulia Roger, Alameda, CA Thu Dec 24, 2009

I'm considering buying a house in 2010, and I've read various estimates about where interest rates might settle in the middle of next year. Any thoughts?

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John-Michael…, Agent, Berkeley, CA
Mon Jun 28, 2010
This is a great question since we are now in Summer and the interest rates are almost a 1/2 point lower the Dec. 2009.
0 votes
Philip kaake, Agent, ALAMEDA, CA
Tue Jan 5, 2010
And thank you Garrick for bringing some much needed precision to the vexing question of rates. I had a feeling they were on there way up however this is a question that needed to be answered by a mortgage broker with his finger on the pulse. Full disclosure, Garrick is a broker that I refer people to and thank rather highly of so I will stick with his prediction. If rates do stay in near these figures we will still have rates that are historically low.
Good luck and don't let the future scare you.
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Garrick, , Alameda, CA
Tue Jan 5, 2010
We know interest rates will be going up soon. How soon and how much are the big questions. There is still no consensus on when the Fed will begin to increase rates. The majority, but not universal, expect the Fed to begin increasing rates by Q3, that would suggest markets will begin anticipating this by moving up rates in late Q1 or early Q2. The other "majority" is hanging to the belief that the Fed will not move up rates until the end of the year or early 2011. This is built on the foundation that the Fed has never increased rates until employment begins to improve and isn't likely through the first half of the year. Whether the feds moves up rates or not, the housing market itself is going to move rates higher. If we look for just one keystone for the economy its the housing sector; and that is not as positive as some believe. The housing market and the commercial markets have a steep hill to climb this year.

My personal prediction is the conforming 30 year will be somewhere between - 5.25 and 5.625 - you heard it hear first! Lets see what happens.

Let me know if you need anything else as far as a true financing professional id concerned!
Web Reference:  http://www.garrick.biz
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Voices Member, , Benton County, OR
Tue Jan 5, 2010
Rates will be higher... But no one really knows so ......

Nothing like "experts" explaining they don't really know :)

Maybe this would be fun to look at...More "experts" guessing in a Mortgage rate survey updated weekly

http://mortgage-x.com/general/rate_trend.asp

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0 votes
Troystaten, Agent, Alameda, CA
Fri Dec 25, 2009
I don't have a crystal ball but all of the experts I have talked to think we are going to be about 1 percent higher by the end of the summer. Rates right know have been held low by the feds and they are not going to do this forever. If you can find the home you like it is a good time to by.

Good luck and Merry Christmas

Troy
Web Reference:  http://www.troystaten.com
0 votes
Barbara Van…, , Folsom, CA
Fri Dec 25, 2009
Expect rates to be .50% to 1.0% higher than today. Mortgage rates are directly tied to the buying and selling of mortgage backed securities (MBS). In January of 2009, the Treasury comitted to purchasing 1.25 Trillion in MBS. They will reached that number by the end of March 2010 and announced at their last FOMC meeting, the program will not be extended. You only have to go back to 2008 (prior to the Treasury buying program) to see that home loan rates trended between 6.25% and 6.75%.

Credit requirements continue to get tigher. Have a mortgage advisor run your credit (its OK to do it now) to learn what is being reported. Learn NOW which loan program is best for you. Learn what the credit requirements are. Six months gives you plently of time to fix any items that need attention. Make sure your qualifying FICO score is at least 660 for a goverment loan or 720 for conventional financing. These actions ensure you will qualify for the best interest rate available when you're ready to get pre-qualifyed.

All the Best,

Barbara
0 votes
Al Akerman, Mortgage Broker Or Lender, Lakewood, NJ
Fri Dec 25, 2009
Here Roger, look what you insired me to do:

http://www.trulia.com/blog/al_akerman/2009/12/first-time_hom…

I only addressed the FTHB credit becaue as I stated in my earlier answer, I think it plays and will continue to play a big role.
0 votes
Al Akerman, Mortgage Broker Or Lender, Lakewood, NJ
Fri Dec 25, 2009
Roger, I answered this question yesterday on the following post:

http://www.trulia.com/voices/Home_Buying/what_is_the_predica…

Although I was a bit sarcastic on the other post, the truth is that we do discuss the future at work all the time. We read as many articles as we could and share information. We very often accurately predict what will happen the next day. Beyond that is always a mystery.


Problem is, that over the past year, market analysts have "flip-flopped" numerous times. For a long time they have been predicting an increase in rates and I would expect one too. That seemes to be the general concensus.


During the months of July and August, rates went up very briefly to almost 6% and we all thought that it was only uphill from there-recovering economy, ect.-but they came right back down.

I think a big key to rates remaining low will be the reaction of first time home-buyers once the $8000 tax credit expires (assuming we don't see another extension) and the effect new and existing home sales would have on the economy.

The problem is that even if we see a drop in home sales, you never know if the government will reintroduce the tax credit to stabilize the housing market, much as the fed would do with rates.

In conclusion, I don't have any prediction. I guess no one really does.

Good luck.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Fri Dec 25, 2009
Unfortunately, none of us knows, but we all will in summer 2010. What we do now know is that interest rates are their lowest level since the 1940's--and if you qualify don't forget about the tax credit--you need to be in contract by April 30, 2010.
0 votes
Jean Powers, Agent, Castro Valley, CA
Fri Dec 25, 2009
Hello Roger,
I wish I had a crystal ball to answer this question. All indications are that they will rise. When I purchased my home in 1973, the interest rate was 7 1/2%. Since I have been in the business I have seen it go up to 11% and about 18%. We have been very fortunate and spoiled because the rates have been so low. Even if they were to rise (and I don't think they will) to 7%, or so, it is still a great interest rate. Prices of homes are still at an all time low.

Happy Holidays to you and yours!!
Web Reference:  http://www.jeanpowers.net
0 votes
John Shellin…, Agent, Pearland, TX
Fri Dec 25, 2009
HIGHER! The economy is improving and the Fed is scheduled to quit buying mortgage backed securities around Marc or April.
0 votes
Richard Leci…, , Tucson, AZ
Fri Dec 25, 2009
Everything points to higher interest rates. The government is spending way too much money and the things in general are staring to look better. I watch a lot of the business news on MSNBC and that seems to be the message they are sending
0 votes
Jacob Varghe…, , San Jose, CA
Fri Dec 25, 2009
Hi Roger,

I do not think even Dr. Ben S. Bernanke will be knowing the answer to this question with 100% accuracy.

The deal is the get the best house, at fair market value. Getting the lowest rate counts but that in itself should not alone be the criteria!!!

Mortgage is all about planning, proper planning, proper reserves, once again it is not just rates!!

Merry Christmas to Staff of Trulia and its avid readers and followers!!

Jacob
Web Reference:  http://www.bestcaloans.com
0 votes
Jenny A. Le, , California
Fri Dec 25, 2009
There are a couple Federal economic stimulus programs scheduled to expire by 2Q 2010. The end of these programs may cause mortgage rates to increase by 1/2 to 1 percentage point.

1. Ends by 1Q2010: http://www.federalreserve.gov/newsevents/press/monetary/2008…
2. Ends by April 30, 2010: http://www.federalhousingtaxcredit.com/

Currently, the national average for 30-yr fixed rate is 5.25% and this rate was at 4.875% in October 2009. So there is an upward trend in mortgage rates: http://www.bloomberg.com/markets/rates/keyrates.html

It's complex to explain on this public platform...the details of mortgage interest rate effects resulted from the Federal government economic stimulus programs, from the current 10% unemployment rate, and from other economic factors such as inventory levels of consumer products, commodities and raw materials.

No one has a magic ball to foresee the future so you can access the mortgage rate trends based on the overall current mortgage rate trends (see bloomberg link above), government planned economic related events, unemployment rate trend (lower or higher by Summer 2010?), and "your" sense of confidence in the US economy by the Summer of 2010.

Sorry there isn't a clear opinion for you, however, I hope the information helps.
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Thu Dec 24, 2009
Roger...........If I could predict the answer to that, I'd buy a lottery ticket instead, or head to Atlantic City and the roulette table.!

Do I personally think the rates will jump up very high (say,more than 2%) within 6 months? Not really..........but I am sure there will be some fluctuation..............However,.I won't venture a guess as to what the rates might be! Certainly, we all hope the rates will remain at least under 6%.

How's that for a wordy non-answer! ha. :) But then, again, who can really answer that for sure?
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