Mortgage Rates.
According to a recent Bankrate.com article, the average rate of a 30 year fixed rate mortgage is up 10 basis points (0.10%) to 5.32% and a 15 year fixed is also up 10 basis points, to 4.7%.
It’s all due to economists declaring that the recession is over, lack of jobs not withstanding.
This week, four in five economists surveyed by the National Association of Business Economics said that the recession has ended and the economy is in recovery.
Don’t expect the rates to jump too far too fast though. The lack of a job market means more homeowners having a harder time finding income and losing their homes to foreclosure or short-sale. Any improvements in the rate of delinquencies and foreclosures will be slow in coming.
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Results of Bankrate.com’s, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:
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| 30-year fixed | 15-year fixed | 5-year ARM | |
| This week’s rate: | 5.32% | 4.7% | 4.76% |
| Change from last week: | +0.10 | +0.10 | +0.10 |
| Monthly payment: | $911.14 | $1,274.08 | $854.76 |
| Change from last week: | +$10.23 | +$8.48 | +$9.92 |
Home Prices.
While mortgage rates have risen, the median home price has fallen from $198,100 to $172,200 and is expected to rise gradually to $185,500 in 2012. Jay Brinkmann, chief economist for the Mortgage Bankers Association, also believes that it will take over 4 years for prices to get back to their 2008 level.
This is great news for buyers, and lousy news for sellers.
If this report and its forecasts are correct, it will be a buyer’s market for the next couple of years, and interest rates are not likely to become drag on home sales any time soon.
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