By Jeff Cox
01 May 2008 | 01:58 PM ET
Thinking of buying a house? Mortgage rates may not go much lower than they are right now, and are likely to start rising.
And if you’re looking to refinance your current mortgage, do it soon.
While mortgage rates did take a dip Wednesday after the Federal Reserve announced it had lopped off another quarter-point on short-term interest rates, the drop isn’t expected to last long. In fact, most experts think home loans will only get more expensive.
Indeed, Freddie Mac reported Thursday that mortgage rates averaged 6.06 percent this week, up from 6.03 percent a week before. The rate represented a seven-week high and signaled that economic factors would continue to pressure mortgage costs.
“It’s a testament to the fact that the Fed does not have any direct influence on long-term interest rates that serve as a benchmark for mortgage rates,” said Greg McBride, of Bankrate.com. “Mortgage rates have pulled back since the Fed’s announcement yesterday, but the ultimate direction of mortgage rates is going to be governed by the outlook for the economy and inflation.”
All this is bad news for people trying to get a home loan.
“All these (Fed) cuts have essentially done almost nothing for borrowers who are looking for 30-year fixed mortgages,” said Mike Larson, an analyst with investment newsletter Moneyandmarkets.com. “You’ve got 300 basis points of Fed cut and all of 40 basis points of reduction in fixed mortgage rates.”
Bankrate lists 30-year rates at 5.80 percent, exactly where they were a week ago before the Fed move.
See the full article here.
