Mortgage rates may trend upward
The Federal Reserve is expected to begin gradually raising the near-zero federal funds rate this year. That move will affect mortgage rates.
"I think they'll incline slightly toward the end of the year," says David Crowe, chief economist and senior vice president for the National Association of Home Builders. He predicts an increase of about 10 basis points, or one-tenth of a percentage point.
In the first half of 2015, the 30-year fixed-rate mortgage averaged 3.92%, according to Bankrate's weekly survey of interest rates. Fisher thinks the 30-year fixed-rate mortgage will reach 4.5% by year's end.
"They're going to be a little bit volatile, so there are going to be up-and-down movements as we go," she says.
This rise in rates will prompt potential buyers to take action, Reaser says.
"For the near term, this prospect of higher interest rates down the road may spur some pickup in homebuying, as individuals who have been sitting on the fence finally jump into the market," she says.
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