Mortgage rates are creeping up again. It seems that the low mortgage rate rally might be ending this year.
Between April and early-November 2010, rates fell more than 1 %. They’ve hovered around the low 4′s for weeks, and now we see them inching up to the high 4′s. Today, Wells Fargo Home mortgage reports rates of 4.875% for a 30-year fixed.
I don't understand how to predict mortgage rates, nor am I a mortgage expert. But I know a few mortgage experts. Here’s how they explain the increasing rates:
“Because the economy is already showing signs of recovery, the Fed’s move is bringing out the inflation hawks…Inflation devalues the U.S. dollar and everything denominated in it. This includes mortgage bonds, of course, so when inflation is present, mortgage bonds lose their street value, and mortgage rates rise to compensate.” Dan Green from the Mortgage Reports.com
Here's a look at what rates have done in 2010:
So, look for mortgage rates to rise. How fast? Depends inflation. You can also watch bond rates and judge from that.
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