After swimming along with mortgage interest rates at ALL TIME LOWS for a couple of months we were shocked back into reality about 10 days ago when they started climbing rapidly. In a period of 5 business days our best conventional loan rates went from 4.5% up to 5.25% and FHA loans rose from 4.875% up to 5.5%. WHEW. Of course these were still fabulous rates compared to historical trends, but we were all shocked anyway!!
Well, in the next 5 days the dramatic rise sopped and rates have again slipped back down a little – and today our best conventional rates are at 4.875% and FHA loans can be priced at 5.375%. No one expects these low rates to stick around forever and every forecast we see has rates rising significantly over the next 12 months. Buyers should take this into consideration and get their bargains now – a difference of just 1.0% increases the cost of ownership of a $300,000 property by $15,000 in the first 5 years. And anyone with a fixed rate of 5.5% or more should consider refinancing to lock in a lower rate NOW.
