Are Interest Rates On The Rise?

“INTEREST RATES HAVE BEEN RIGHT AROUND 5.0 PERCENT FOR QUITE AWHILE NOW. IS THIS TREND GOING TO CONTINUE OR ARE WE GOING TO SEE RATES RISE SOMETIME IN THE NEAR FUTURE?”

Although it’s difficult to predict the future of interest rates (even the experts usually disagree), it’s a fairly safe bet to assume that interest rates probably won’t be going down in the near future—and will more than likely rise. Over the past year or so, the rates on a 30-year fixed-rate mortgage have held steady—for the most part—at or slightly above 5.0 percent, with a couple of dips into the high 4.0 percent range. The usual indicators for interest rate movement—inflation vs. recession, the current Federal Funds Rate (set by the Federal Reserve), 10-year Treasury bonds, etc.—all suggest that interest rates will indeed rise at some point. The biggest unknown, however, is the timing of interest rate hikes. Although some experts believe rates will stay at or just above the 5.0 percent mark for at least the rest of 2010, others, such as the Mortgage Bankers Association, believe interest rates will rise to 5.5 percent by late summer and hit 6.0 percent by the end of the year. In the end, no matter what the timeframe turns out to be, sooner is probably better than later if you’re considering buying or refinancing. ∆