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Higher than they are today Inflation seems to be picking up a bit and the Fed will eventually have to take action raise rates. That will ultimately impact the bond market and in turn mortgage rates. If I had to guess I would say 6-7% ... but who knows!
6-7% is a huge difference from current rates. If it goes that high, would that out negative pressure on housing prices, or would people just have to make due with less house than they can afford now?
I'm not expecting much difference in the rates, say max 3%. It will follow the same trends will increase then decrease, again there might be a small dip, then there will be a hike. They can take it into heights but they know by doing so indirectly they will lose the whole control of the business. I actually had this conversation with my financial solution service in, Toronto ON, regarding the mortgage rates in future, they gave similar signals and even I think the same.
Last edited by Debsi; 07-08-2014 at 08:25 AM..
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If it goes to 6-7%, then there won't be too many buyers in the market.
This will not be good for people who are planning to sell their house in 4 years. They will be forced to lower their home price to sell.
In addition to this, inventory in the housing market will raise to much higher level with only very few people available to buy homes. All investors will move to other markets (stock, gold etc.).
Homes in very good neighborhood/school districts will stay flat, and other home prices will slowly go down.
I still think we are not going to recover for all consumers equally across the board.....and that will keep rates low. I would expect them to remain below 6%, and closer to 5% -5.50%.
If it goes to 6-7%, then there won't be too many buyers in the market.
This will not be good for people who are planning to sell their house in 4 years. They will be forced to lower their home price to sell.
In addition to this, inventory in the housing market will raise to much higher level with only very few people available to buy homes. All investors will move to other markets (stock, gold etc.).
Homes in very good neighborhood/school districts will stay flat, and other home prices will slowly go down.
If investors pull out of the housing market and dump housing will go further down the toilet. At that point renters fence sitters and people that were priced out would ( hopefully) step in and prop the market. Thats what everyone hoped would happen. And everyone who bought at high price low rate is screwed cause their house just lost equity and theire upside down ( granted it depends on how much they paid vs the equity gained and how much house prices drop)
I expect rates to go up a bit but look what happened when the fed let that 2013 spike from 3.5 to 4-4.5 % rate jump. Loan initiation and refi hit a wall. So they would have to slowly raise rates. Sort of like the frog in the pot of water.
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