With the government support of mortgages beginning to phase out, many experts in the industry are wondering if that will make mortgage rates go up. Along with the rollercoaster weekend we have had in the mortgage industry, nobody is completely certain about what is going to happen.
Government officials are saying that the year-long support is going to end in the next couple months. On the good side, the support from the government brought mortgage rates to a low we have not seen since the end of World War II. But once that support stops, rates are not going to stay that low. So if you are thinking about buying a house and hesitating because the rates may go even lower, think again. Now may be the best time to jump into that mortgage while the government is still lending its support to the housing industry.
While rates are expected to climb following the absence of government support, nobody knows exactly how much they will climb. Unfortunately, we have seen a resurgence in the real estate industry lately due to the low rates. As a result, the economy seems to be on an upswing as of late. Once that support goes away, though, think we will be back into the same troubles we were in before.
Currently, mortgage rates for a 30-year fixed is hovering around five percent. Last week, the rate dropped to about 4.99 percent, but the weekend saw a slight increase to about 5.05 percent. Those rates are awesome considering they stood at about 6.04 percent less than 18 months ago. That was before the feds began supporting the mortgage industry by purchasing mortgage-related securities.
According to the assistant U.S. Treasury Secretary, Michael Barr, the feds did what they thought was necessary to help stabilize the mortgage industry. However, officials in the administration do not believe that it is necessary to continue the efforts for much longer because it has to stop sometime.
Some “in the know” do not think that the federal government will withdraw support just yet. Nobody knows for sure what will happen. Will the feds stop buying mortgage-related securities? If they do, how high will the mortgage rates go? How low will the rates go before the government stops supporting the industry? The only thing you can be sure of is there are no certainties in the mortgage industry.
If you are able to buy a house and you are waiting to see what happens, don’t wait much longer. Mortgage rates are lower than they have been in decades and they probably won’t drop much lower than they are now. And things are too uncertain to have a “wait and see” attitude. Get in while the market is hot or you may miss your chance for several more years!