By Rosie Amodio | realtor.com
We’ve ridden the absurdly low interest rates train for more than seven years now; is that money-saving journey coming to an end? Not sure you noticed, but from January to June, 30-year fixed mortgage rates actually crept up from 3.7% to 4.2%; they are now hovering around 4%.
According to our chief economist, Jonathan Smoke, a 6% interest rate is “normal.” But Smoke doesn’t see us hitting that in the next two years: “We will likely see less than a 100 basis point increase over the next two years, which would bring us to around 5.5% in 2017.” Still below normal! If that increase does in fact happen, it would translate into a 12% increase in monthly payments over current rates. This affects mortgage shoppers, of course, and also those holding adjustable-rate mortgages.
