One of the most asked questions for every home owner in the year of 2009 will be, "where are mortgage rates headed?" Obviously, no one can be 100% confident in making this prediction, but if we look at the recent events in the United States economy, we can at least make an educated guess.
Many lenders are advertising that rates under 5% are currently available. These rates are truly only available to applicants who have 20% to put down on a mortgage and a FICO score of over 700. Many Americans do not have these financial standards due to the struggling economy. The average 30 year fixed rate mortgage is currently at 5.26%. Once again, to gain access to this rate, one must have a solid credit rating and some financial backing. With that known, where are rates headed?
If rates are currently at 5.26% and have declined steadily over the last eight weeks, why would anything change? Shouldn't they continue to head lower? That would be the logical guess, but sometimes markets do not work in ways that seem logical.
The amount of mortgage applications has increased by 48% over the last few weeks, so it has been quite difficult on the mortgage lenders. Some lenders have even increased rates so they could complete all the applications that are flooding in. Yes, the overall trend is down for mortgage rates, but it would not be surprising at all if there was a quick bounce just to get most lenders caught up with their paperwork.
Even if there is a bounce, it is still not a bad idea to keep an eye on the overall trend which seems to be downward sloping. Look for a quick bounce in rates and then a steady decline as the year wears on.
To learn more about mortgage rate forecasts and the housing market as a whole, be sure to join Subprime Blogger. Make sure to find out what the mortgage interest trend is as well as many other financial articles that are available at Subprime Blogger. Take advantage of the low rate market we are in
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