30 Year Fixed Mortgage Rates – Interest Rates Above 5% in 2010
Posted on | December 30, 2009 | No Comments
The current average for 30 year fixed mortgage rates is 5.04%. The 30 year fixed mortgage rate has been as low as 4.49% in the last month and as high as 5.35%. This great volatility in mortgage rates is likely caused by the uptrend in the 10 year treasury rate yield. The 10 year yield has moved from 3.2% all the way up to 3.85% in less than a month.
If you are hoping to time the bottom for mortgage interest rates then you might be one month too late. At the end of November we saw all-time lows for 30 year fixed rates at 4.49%. Since then it has been a straight shot up to the current levels of 5.05%. Many economists feel that interest rates are likely to increase even more in 2010.
We recently heard from Morgan Stanley and they feel that mortgage rates could reach as high as 8% in the next year. If mortgage interest rates get this high it will be very interesting to see what it does to the housing market. There is little argument that the low interest-rate environment we are currently seeing has greatly help to stabilize home prices.
If mortgage rates start to increase drastically homeowners and future homeowners will not look to get in the market any time soon. This could cause another drop in prices which is not what America needs at the present time. No one knows will happen to mortgage interest rates over the next year but something that Pres. Obama and his staff do not want to see is mortgage rates moving all the way up to 8%.
On the opposing side of the argument, Goldman Sachs feels that mortgage rates are going to stay around 5% or below. If mortgage rates can stay at 5% the housing market will likely stabilize and start to move higher which is very good for the overall economy. It will be very interesting to see who is right, Goldman Sachs or Morgan Stanley?
Author: Alan Lake
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