Since the economic meltdown of 2008, mortgage rates dipped to historic lows. Several years of consistently low rates fueled a refinancing boom that appears to be on its way out. Though news is mixed concerning the economy’s overall improvement, most gut reactions point to a period of rising rates.
Lake Michigan Credit Union’s Secondary Marketing Manager, John Collins, cites speculation regarding the Federal Reserve’s Quantitative Easing (QE) program for much of the mortgage market’s current mayhem.
Collins states, “The QE program, which creates artificial demand for mortgage backed securities (and lower interest rates), is expected to taper sometime in the coming months. With little new information coming from Fed Chairman Ben Bernake, industry experts have relied heavily on economic data to forecast the timing of that tapering. Mixed messages mean increased volatility. Most experts who deal directly with the Fed expect it to reduce its bond buying beginning no later than October of this year.
Such a move will likely cause interest rates to rise further, perhaps approaching 5% by year’s end.”
The upside is that mortgage rates are holding at still-attractive levels. The downside is that rates will likely soon be on the rise.
No matter what the rates may be, one thing is crystal clear–you’ll save more with Lake Michigan Credit Union’s guaranteed lowest mortgage rates. Visit any LMCU branch, call (616 or 800) 242-9790, or go online to lmcu.org today to find out more.