No crystal ball can tell the future of interest rates in the United States, specifically home mortgage interest rates. Some experts make compelling arguments that interest rates are on the cusp of rocketing upward; others believe they will remain historically low for the foreseeable future.
“Predicting the direction of interest rates from one day to the next is an impossible task. There are too many variables in the world today that have an impact on how Wall Street traders view the marketplace," said Jim McKenna, of Atlantic Home Loans Inc.
"From the sovereign debt crisis in Europe, to the natural disasters in Japan, to the political unrest spreading across North Africa and the Middle East, it’s impossible to predict how these events might impact our economy, and therefore impact mortgage interest rates. Mortgages are, after all, government backed bonds. These bonds lose value in the face of rising inflation.”
Phil DeMuth, an investment advisor, and author of “The Little Book of Alternative Investments,” says now is a great time to buy a house.
“Housing prices are where they were back in 2002 and you’ve got mortgage rates at five percent now on a 30-year mortgage," he said. "If you can put the 20 percent down and qualify for a good mortgage, this is an excellent time to buy a house. It’s tough to forecast interest rates, but I see the current situation as a win-win for the potential home buyer.”
According to the analysts of Moody’s Analytics, “houses are more affordable now than they have been in decades, and in some areas, prices are listed below the valuation level prior to the housing bubble which peaked in early 2007.”
With the spring market in full bloom, this is a great time to sell or buy a house.
Jim McKenna can be reached at 973-271-2240 or via email at email@example.com.