Interest rates climbing, doubtful we’ll see a return to sub-5% rates anytime soon

Interest rates are well over 5% now, roughly 5.3% last week now at 5.5% and still climbing. Yesterday in fact there were several rate increases climbing_interest_ratesthroughout the day with some lenders stating their base rates are now at 5.75%. Several lenders we work with feel there could be another slight dip in rates later this year however that would jeopardize the tax credit for those of you in the market to take advantage of it, in other words waiting *might* get you a half point lower rate if those lenders are correct however it will cause you to miss the tax credit deadline to be closed on a home purchase.

Historically rates are still very low however we’re about to move back into “typical” waters with rates and could see them begin to climb rapidly. With the debt load on the country and the massive spending over the last year, and continuing, inflation is bound to pick up pace and as a result we’re likely to see rates rise sharply to stem inflation. We can only hope we don’t see late 70′s early 80′s rates in the high teens but it is possible and some economists are warning it’s already unavoidable; time will tell. If that does happen we’ll be moving from one devastated market into another; here’s to hoping those worst fears from some economists are wrong.

~Scott McDonald : Your Oregon Real Estate Resource

Tags: ,

Comments are closed.