Reno, NV (PRWEB) March 23, 2006
When asked, "How high do you think mortgage interest rates will climb in 2006?” nearly two thirds of respondents predicted rates to end up between 6% and 7%. This was one of the findings in a survey commissioned by GuideToLenders.com, and it is consistent with the Mortgage Bankers Association's (MBA) forecast for the year. MBA predicts interest rates on a 30-year fixed rate mortgage to be 6.5% for the second quarter, 6.6% for the third quarter, and 6.7% for the fourth quarter.
These predictions may be reactions to expectations that the new Federal Reserve Chairman, Ben Bernanke, will raise short term interest rates at least twice more this year. Consumers participated in a survey (Is it Time to Refinance Your Mortgage?) designed to understand the decision process around refinancing. In response to the question, “How high do you think mortgage interest rates will climb in 2006?” participants could choose from a list of interest rates from 5.5% to 8%. The majority of voters, nearly 60%, believed that mortgage interest rates would stay between 6% and 7%. A significant proportion, around 35%, believed that rates would top 7%. Only 6% of respondents thought that interest rates would stay below 6%.
In a more detailed analysis, it was observed that 17.5% of respondents believed that interest rates would climb to 6.75% in 2006. A similar percentage believed that rates would rise to 7%. A smaller percentage, 14.0%, believed that interest rates would top 8%. It appears that consumers and experts think that record low rates have run their course and that an upward trend is due. Robert Lapic, a spokesman for GuideToLenders.com, said, “This survey indicates the growing concern that consumers have over rising interest rates in 2006. I wouldn’t be surprised to see consumers refinancing as a way of locking down rates before they climb even further.”
GuideToLenders.com is a consumer resource featuring guides on how to choose the right loan, mortgage calculators, credit scores, and consumer financing options. It incorporates a choice of mortgage lenders offering products including new home financing, refinancing, home equity line of credit, and debt consolidation loans. To find out more, visit http://www.GuideToLenders.com.