ARE MORTGAGE RATES GOING UP?
Minneapolis, MN: Mortgage interest rates jumped up last week, putting a scare in those sitting on the fence, thinking about refinancing, yet waiting form rates to drop a bit lower. Lucky for them, Minnesota mortgage interest rates moved back down slowly to about where they have been holding for some time.
The big question is how long can mortgage rates remain this low?
Mortgage rates have been stuck at these amazingly low levels for the past five months. According to Freddie Mac weekly survey of mortgage rates, last week was the first time that interest rates on a standard 30-year fixed-rate mortgage rose above 4 percent, only to slip back below this week.
It’s very clear that mortgage rates can’t stay this low forever. It was big news when 30-year rates fell below the 5 percent mark in March 2009 – a level unimaginable just a few years before. Now we’re a full percent lower than that. When you consider that rates rarely fell below 7 percent prior to 2001, and often ranged much higher, it’s clear that rates will eventually move back toward more historical norms. When I bought my first house in 1981 – I paid 16% for an FHA 30-year fixed mortgage.
The question is, when will that happen – and what will trigger it? So, is it smart to keep holding out for lower refinance rates? Probably not… Is it wise to not buy a house today? Probably not, especially with these interest rates and zero down programs like the VA loan program, and the USDA Rural Development Program.