The 2010 rate picturePosted by Jolenta Averill, Broker on Friday, January 22nd, 2010 at 10:00am.
Although no one knows for sure what's going to happen, the consensus among the lenders in my network seems to be that they would not be at all surprised to see rates climb back to between 6.0% - 6.5%. That is exactly where they were prior to December 2008 when the Fed first announced it would start buying mortgaged-backed securities and rates suddenly took a dive. Still excellent by historical standards (after all, rates were in the double-digits in the early 1980's) but much higher than the sub 5.0% rates we're typically seeing today. I suggest that if you are a potential buyer of real estate right now you'll want to seriously think about getting into a contract and locking your rate well before the end of March 2010 to avoid the possibility of missing out on the current great rate picture. One thing everyone seems to be pretty sure about is that rates will not go down when the Fed stops buying mortgage-backed securities. To think otherwise is simply unrealistic. If you are a first-time homebuyer or have owned a home for a few years and are a trade-up buyer or investor, you have even more reason to sort out what you're buying before the current tax credits expire. Again, no one knows for sure but it would be crazy to assume that Congress is going to pass another extension.
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Jolenta Averill, Principal
Lake & City Homes Realty