Fed beginning to let rates rise from lowest in history. Inching up to 5% or free market rise?
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MORTGAGE DECISION. “Why should I buy the same house, same location, same condition and pay more? It’s just a vacation home. Let’s wait and see. Paraphrased, this is buyers historical reaction when mortgage rates took a significant upward turn.
Seller caution: Sooner may be better that waiting to see what happens in 2016.
The table below shows Freddie Mac’s rate forecast for 2015.
It is based on their economists’ analysis of current trends within the housing market, the lending industry, and the broader economy. According to a company press release, “we expect to see rates rise as the economy strengthens. At the end of 2015, we expect to see the 30-year fixed mortgage around five percent.” That would be a gradual increase over the coming months, as seen in the projection table below.
Q: (Will rates hold at 5% or is the Fed and Congress in favor of a free market rise?)
The Mortgage Bankers Association (MBA) chart is nearly identical to the one shown below. They also expect the average to rise to 5% through the end of 2015.
Under 5% for past 5 years; California Mortgage Rates 2010 to mid 2015…MBA
1962 to 2010 Remember the 1980s? Historically over 5%.
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