Interest rates on long term mortgages crawled up to a new high for both 15 year and 30 year mortgages. The 30 year rate was up to 6.28% and the 15year rate rose to 5.91%. While the rates have risen only marginally compared to December levels, they are leading to discomfort in the market as long term mortgages were becoming a popular refinance choice. With these rates beginning to crawl up as well, the overall impact on the already flattened realty market will not be conducive.
Long term rates are expected to firm up further and experts believe that the 30 mortgage rates could be close to 7% by the end of the year on the back of the US Fed’s expected increases in interest rates in the next two quarters.
With this scenario in the offing, one can expect stagnation in the US realty markets if not an actual downturn.
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