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Mortgage rates, where they have been and where they are going.
By: Jake Davis at Newloanexpert.com
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.
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