Mortgage Rates Increase

November 18th, 2010

Mortgage rates have been on the rise. I am not sure if its part of a long term trend, or if its a short term blip. I have seen in the past 25 years I have been in this business that rates do generally move in “waves” and cycles, and I’d guess we are now bouncing off the bottom of the lowest rates, and heading higher. Where we stop, nobody knows.

I had predicted here that rates were at or very near a bottom, because 220 years of history says rates have almost never been lower in our country. And almost a month ago I read an article in the Wall Street Journal online that stated, “Mortgage rates may be as low as they will go, with the average 30-year fixed-rate home loan on course to rise after hovering for months at historically low levels. The Mortgage Bankers Association predicts rates on the 30-year fixed-rate mortgage will average 4.4% in the fourth quarter of 2010, increasing to a 4.7% average in the first quarter of 2011, and climbing to 5.1% by the end of next year.”

So far mortgage rates have increased anywhere from .25% to .50%, depending on the specific loan type, and other variables.

Whatever the case, don’t assume rates always stay low. Rates move, they change, they go up and down. They have been low for a very long time, and seem due for a change for many reasons. Many people argue rates only go up if the economy is strong, but rates do not only go up when there is strength…ever heard of stagflation, or fear of inflation or hyperinflation?

If you are a refinance shopper, I’d say its time to act, and quickly. If you are a potential home buyer, it may be time to get off the fence!

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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