When Mortgage Rates
Rise
Mortgage rates are likely to remain low for a few more months, according to economists. After predicting that an increase was inevitable this year, they now believe the average 30-year fixed mortgage will not hit 5 percent until mid-2015, partly in response to the Federal Reserve's plans to scale down its purchases of mortgage-backed securities. The 30-year national average was 4.28 percent a week ago, according to HSH.com. Although 5 percent is still low by historical norms, such an increase can reduce buying power more than borrowers may think and can have a substantial effect on demand. Nonetheless, homes remain relatively affordable, with people spending about 15 percent of household median income for the median-priced home, compared to about 22 percent from 1985 to 2000.
From "When Mortgage Rates Rise"
New York Times (09/28/14) P. RE12 Prevost, Lisa
Mortgage rates are likely to remain low for a few more months, according to economists. After predicting that an increase was inevitable this year, they now believe the average 30-year fixed mortgage will not hit 5 percent until mid-2015, partly in response to the Federal Reserve's plans to scale down its purchases of mortgage-backed securities. The 30-year national average was 4.28 percent a week ago, according to HSH.com. Although 5 percent is still low by historical norms, such an increase can reduce buying power more than borrowers may think and can have a substantial effect on demand. Nonetheless, homes remain relatively affordable, with people spending about 15 percent of household median income for the median-priced home, compared to about 22 percent from 1985 to 2000.
From "When Mortgage Rates Rise"
New York Times (09/28/14) P. RE12 Prevost, Lisa
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