Mortgage interest rates continue to rise on almost a weekly basis, according to information released by Freddie Mac. The average rate on a 30-year fixed mortgage jumped to 5.05 percent last week. That is the highest the rate has been in over three years and is the 6th straight week that the rate has gone up.
After seven months of declines that put the benchmark 30-year rate at a half-century low last year, the rise in rates has driven down demand for financing and is leading more and more investors to seek alternative forms of mortgages. The Mortgage Bankers Association (MBA) reports on an almost weekly basis that the demand for mortgages continues to set new lows each week.
With analysts warning about continued hike in rates, any stall in home purchases will have a chilling effect on an already fragile housing market. What these trends are allowing for though is a huge increase in cash investors entering the market and driving bargain prices even lower.
Freddie Mac’s study, which is based on data gathered from about 125 lenders across the country, tracks rises in rates across the board. Every loan product, not just the 30 year mortgage showed increases.
Each week, Bank rate surveys a panel of mortgage experts for their predictions of which way rates are headed over the next seven days. In a landslide, 80 percent of the panelists are calling for continued increases in mortgage rates. Just 13 percent forecast a decline in mortgage rates, and 7 percent expect no change over the next weeks.
With economic predictions like these, I would say it is definitely time to use your allotted number of mortgages for real estate investing while the money is still cheap. As long as the property produces a strong cash flow, get the best rate and term you can while rates are still at these historic lows because many economists also say these rates will most likely not be seen again for a very long time!