Mortgage Interest Rates Stay Low. Surprise!

Before you go, we thought you'd like these...
Interest rates stay low. Photo: Women operating tickers and stock exchange boards, 1918. Bracing for higher mortgage rates? Well, relax. Looks like rates will rise much more slowly than anyone anticipated.

Number crunchers now predict that interest rates for 30-year, fixed-rate home loans will average 5.6 percent in the fourth quarter of this year, according to Freddie Mac's latest Economic and Housing Outlook. That's a big change from just two months ago, when they predicted interest rates would rise to 6 percent.

What's happening? Interest rates were expected to rise this year as the federal government ends a massive effort to keep interest rates down during the financial panic. The government is ending its buying spree, as promised. But so far, private investors have pumped cash into the mortgage market fast enough to replace the federal dollars that are no longer flowing, keeping interest rates relatively low.

"Financial market conditions are improving," says Frank Nothaft, Freddie Mac vice president and chief economist. "Liquidity is returning to the markets, even as the Fed discusses its eventual exit from the extraordinary measures put in place during the crisis."
As a result, you can still get rock bottom low interest rates for home loans, despite predictions to the contrary.

Interest rates for 30-year, fixed-rate home mortgages averaged 4.96 percent, plus an average origination fee of 0.7 percent of the loan balance, for the week ending March 18, according to Freddie Mac's latest Primary Mortgage Market Survey.

That's up slightly from 4.95 percent last week - but still well under 5 percent, and not far from the lowest-ever-recorded interest rates of end of last year, which bottomed out at an average 4.71 percent for the week ending December 3.

Rates were highest in the North Central region, averaging 5.02 percent with an average origination fee of 0.5 percent. Rates were lowest in the Southwest, averaging 4.91 percent with an average fee of 0.6 percent.
Read Full Story

Find a Home

Buy
Rent
Value
Powered by Zillow

People are Reading