As much as I wish the title “Going, Going, Gone!!” is a reference to a Pittsburgh Pirates’ home run, this post is going to discuss interest rates, and how they are on their way to being hit out of the park. An April 10th article from the New Times warns us that interest rates are on the incline, and possibly for a very long time.
As the future is just now beginning to look promising for a national recovery, interest rates are likely to climb from their all time lows. If you were able to purchase a home during this “recession” you were able to lock in some of the lowest interest rates ever recorded. However, as our economy recovers, rates are to climb, and the first market to feel the heat will most likely be the housing market. Since December, the rate of a 30-year fixed mortgage rate has risen half a point to 5.31, the highest rate since last summer. Not concerned about half a point? Rates are expected to climb to 5.5 percent by the end of the summer and as high as 6 percent by the end of the year. To put things in perspective, it only takes a 1 percent increase in a mortgage rate to add as much as 19% to the total cost of a home. Mortgage rates are unlikely to be any lower than they are right now, so if you are considering building a new home, the time is now, and we cannot stress that enough.
The climb in interest rates does not end with mortgage rates, follow the link to the NY Times for the full story: http://www.nytimes.com/2010/04/11/business/economy/11rates.html