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Friday, March 26, 2010

Will mortgage interest rate go up later this year 2010?

I have been getting a lot of updates lately from the mortgage industry about their speculations that interest rates might go up later this year after the Fed's stop buying mortgage backed securities on March 31, 2010. I just received the Realtor magazine April issue. It predicts higher interest rate. It says "The Fed's commitment ends March 31 - and while the full impact won't be known for several months, it's almost certain to cause rates to rise. NAR Chief Economist Lawrence Yun anticipates an increase of 30 basis point (100 basis points equals a 1 percent change), but he notes that home sales shouldn't be heavily impacted as long as the economy keeps growing and jobs are created. Of course, rates could inch up independently of this action, because with economic growth comes increased demand for loans".

For more details of the Fed's plan to end mortgage intervention on March 31, see the link here. http://www.nytimes.com/2010/03/17/business/17fed.html

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