San Diego, CA (PRWEB) June 17, 2014
LoanLove.com is a borrower advice website that is dedicated to empowering readers with first class knowledge, valuable resources and connections to top rated industry professionals in order to help them to find loans that they will love. In order to give home buyers and owners a better idea of what is in store as far as interest rates go in the next few years, the website recently released an article that offers a 5 year interest rate outlook so that mortgage owners will be able to better plan for the future.
This new guide, titled, “Will Interest Rates Keep Rising? (Five Year Projection)” explains that most projections going into the year 2014 predicted that rates would climb steadily throughout the year. However, with the year now half way through it is clear that while this prediction has come true to an extent, rates have not risen at the pace which was originally expected. But because rates are slowly increasing, many borrowers will likely be wondering if rates will continue to go up. The Loan Love article helps answer this question by giving information on a five year forecast for interest rates. It says,
“There are numerous predictions of interest rate forecasts, with most focused on the idea that historically low rates enjoyed in recent months are not sustainable as the economy continues to recover. Therefore, the longer-term forecast would seem to suggest a rise in interest rates over the next five, or even 10, years. However, a few analysts point not to the past year, but to 40 years of historical data in predicting where interest rates are headed for 30-year mortgages. When this data is closely examined before calculating a forecast, there is an overwhelming probability, slightly over 90 percent, that the rate will actually fall in five years, based on December 2013 to December 2018 comparisons.”
The same forecasting process also suggests there is 9.2 percent probability interest rates will be higher and a 0.4 percent probability that rates will stay the same or at least be at the same point exactly five years from now. However, while rates may go down in the years to come, most analysts still predict higher interest rates in the short term. Business forecasts publisher, Kiplinger, has even gone on the record, stating that it expects mortgage rates for 30-year fixed mortgages to be as high as 5.5 percent by the end of this year. However, this small increase in mortgage rates is not expected to damage the recovery of the real estate market much. Loan Love says,
“Put into perspective, consider the following parameters:
The result is a mere $61 increase in monthly payment. If you are in the process of purchasing a new home, the current advice is to go ahead and lock in an interest rate once you’ve set your closing date. While they may differ when it comes to longer-range forecasting, most experts are still predicting a rise in rates before 2014 draws to a close. While increases in rates have been less than dramatic, the trend for them to inch upward is expected to continue and for those forecasters not relying on 40 years of historic data, there is the expectation that average rates will creep upward over the next five to 10 years. Those continued low interest rates are a sign of lingering attempts to address the problem of a hurting economy. While economic recovery has been steady, it has also been slow, with interest rates hovering around historic lows well into 2014 even as the housing market continues to draw strength. This has spelled less drama for rates in the first half of the year.”
For more information on this topic, click here to read the full article at LoanLove.com.