The 30 year fixed mortgage rate forecast shows a trend of steady increases from the current quarter through the end of 2010, with an estimated rate of about 6% at that time.
One of the categories listed in both forecasts is the 10-Year Treasury Bond Rate, which has been commonly used as a barometer of mortgage rate trends.
30 year fixed mortgage rates typically track the 10-year treasury note, and normally about 1.5 to 2% is added as a risk premium to lenders and investors for the inherent risk associated with mortgages. See a quick survey of current mortgage rates.
Based on forecasts of the 10-year Treasury Bond Rate, there may be corresponding trend in mortgage rate increases coming at a steady pace per quarter, which could amount to about a 1% rise in mortgage rates by the end of 2010.
If these rate forecasts hold true, we may see 30 year fixed mortgage rates increase to 6% or higher by the end of 2010. Rising mortgage rates are a cause for concern, especially in a struggling housing market. Mortgage applications could slow if demand drops for home buying and refinancing. Higher rates can potentially reduce the number of qualified mortgage borrowers, affect the recovery of the real estate market, on and raise payments for homeowners with adjustable rate mortgages.
Considering the sources of the economic forecasts, the potential mortgage rate trend for 2010 should be a point of interest for both consumers and the housing industry.
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