2009 Mortgage Rate Forecast
In a recent home financing article written by Luke Mullins, he explores and declares “seven things you need to know about mortgage rates in 2009.” Just last year, most mortgage executives forecasted higher interest rates for mortgage loans in an effort to curb the growing fears of inflation. Of course declining home prices across the nation and emerging foreclosure crisis did play a significant role in the Federal Reserve slashing key interest rates consecutively. Mike Larson, a real estate analyst at Weiss Research said, “The preponderance of forces that would typically operate on mortgage rates—the economic backdrop, the inflation backdrop, and, in this case, government policy—are all pointing towards lower interest rates.”
Mortgage rates have become more alluring when the thirty-year mortgage loans featuring fixed rate terms dropped below 5.5%. VA and FHA mortgage rates continued to decline as well. This spurred an increase for both new home purchase and mortgage refinancing application volumes. Mullins examines the current mortgage rates while look forward into 2009 where many real estate financing experts anticipate more rate cuts and expanded FHA loan programs in an effort to stem the foreclosure crisis.
1. 2009 Rate Outlook: Thirty-year fixed mortgage rates should begin 2009 at around 5½ %, says Keith Gumbinger of HSH Associates. From there, they will “wax and wane” in the 5½-to-6 % range, before closing out the year somewhere between 6 and 6¼ %. “That’s still very attractive,” he says. “There is no reason to think that mortgage rates are going to go up so substantially so as to erode the marketplace.” Read complete article >
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