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Mortgage Rate Forecast For June 2008
Fixed mortgage rates will start at their highest levels in over 11 weeks to start the month of June, which won’t help the start to this summer’s home buying season. A weak housing market and fears that inflation could get out of control is not good news for mortgage rates.
Fixed mortgage rates will be very susceptible to increasing as the month wears on as reports suggest the Federal Reserve should be raising rates in the near future to combat inflation. "Mortgage rates drifted up this week over market concerns that the Federal Reserve Board may raise short-term rates later this year," said Frank Nothaft, Freddie Mac vice president and chief economist. "A recent working paper published by the Federal Reserve Bank of Minneapolis suggested that the recent rate cuts run a risk of unhinging long-term market expectations for inflation.”
The 30 year fixed mortgage rate is starting the month out at 6.08 percent, according to Freddie Mac’s Primary Mortgage Market Survey, which will be the second consecutive month at which the rate has started the month out over 6 percent and the highest lever the rate has been in 11 weeks. Current market conditions suggest that the 30 year fixed mortgage rate could reach a level as high as 6.50 percent before the end of the month but closer to 6.30 percent is not far fetched.
The 15 year fixed mortgage rate is starting the month out at a 13 week high of 5.66 percent, according to Freddie Mac’s PMMS, and like the 30 year fixed mortgage rate is likely to continue its path upward. By the end of June it would not be surprising to see the 15 year fixed mortgage rate over 6 percent with 5.8 percent being closer to the norm.
The 5 year and 1 year adjustable mortgage rates have held pretty steady throughout previous months. We may see a slight decrease throughout the month of June but if market conditions continue to worsen adjustable mortgage rates may see a slight increase of up to .20 percent.
There has been mixed data on the housing sector over the past couple of months with many believing that the worse is over. Home values in some markets have actually begun to increase and homebuyers are beginning to submit purchase applications.
However, declining markets have taken a toll on the overall housing economy and may continue to get worse. Fannie Mae lifted restrictions, beginning June 1st, in declining markets which will make it more affordable for homebuyers. Homebuyers in declining markets can now purchase homes with as little as 3 percent of a down payment, NAR believes this move is a step in the right direction to help spur home buying in the declining markets area.
Submitted by admin on 5/31/08
Fixed mortgage rates will start at their highest levels in over 11 weeks to start the month of June, which won’t help the start to this summer’s home buying season. A weak housing market and fears that inflation could get out of control is not good news for mortgage rates.
Fixed mortgage rates will be very susceptible to increasing as the month wears on as reports suggest the Federal Reserve should be raising rates in the near future to combat inflation. "Mortgage rates drifted up this week over market concerns that the Federal Reserve Board may raise short-term rates later this year," said Frank Nothaft, Freddie Mac vice president and chief economist. "A recent working paper published by the Federal Reserve Bank of Minneapolis suggested that the recent rate cuts run a risk of unhinging long-term market expectations for inflation.”
The 30 year fixed mortgage rate is starting the month out at 6.08 percent, according to Freddie Mac’s Primary Mortgage Market Survey, which will be the second consecutive month at which the rate has started the month out over 6 percent and the highest lever the rate has been in 11 weeks. Current market conditions suggest that the 30 year fixed mortgage rate could reach a level as high as 6.50 percent before the end of the month but closer to 6.30 percent is not far fetched.
The 15 year fixed mortgage rate is starting the month out at a 13 week high of 5.66 percent, according to Freddie Mac’s PMMS, and like the 30 year fixed mortgage rate is likely to continue its path upward. By the end of June it would not be surprising to see the 15 year fixed mortgage rate over 6 percent with 5.8 percent being closer to the norm.
The 5 year and 1 year adjustable mortgage rates have held pretty steady throughout previous months. We may see a slight decrease throughout the month of June but if market conditions continue to worsen adjustable mortgage rates may see a slight increase of up to .20 percent.
There has been mixed data on the housing sector over the past couple of months with many believing that the worse is over. Home values in some markets have actually begun to increase and homebuyers are beginning to submit purchase applications.
However, declining markets have taken a toll on the overall housing economy and may continue to get worse. Fannie Mae lifted restrictions, beginning June 1st, in declining markets which will make it more affordable for homebuyers. Homebuyers in declining markets can now purchase homes with as little as 3 percent of a down payment, NAR believes this move is a step in the right direction to help spur home buying in the declining markets area.
Submitted by admin on 5/31/08
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