Mortgage rates expected to increase in 2011
10/28/2010
By Credit.com Staff
Mortgage rates will soon begin climbing again, and could near 5 percent by the end of 2011, a new forecast from the Mortgage Bankers Association reported. This will, in turn, lead fewer consumers to seek new refinances, and could cost the mortgage industry over $400 million next year.
"Various factors are driving our rate forecast. The sluggish economy, weak private demand for debt financing, and low inflation are keeping downward pressure on rates," said Jay Brinkmann, the MBA's chief economist and senior vice president for research and economics.
Brinkmann added that there is speculation within the industry about what the Federal Reserve Bank will do in terms of changing its monetary policies to further encourage growth.
Consumers have been refinancing homes with great fervor in recent months as a result of the current interest rates, and now some are even beginning to purchase new homes thanks to the low cost of borrowing.
