2011 Interest Rate Forecast
Rate forecast
Mortgage rate forecast less of a bargain

That's not true for home prices, however. Nothaft sees housing values bottoming out in the first half, then slowly rising. Findlay says prices nationally have fallen about 28 percent peak to trough; he thinks they will drop another couple of percentage points.

Pete Flint, CEO of Trulia.com, a realty research firm, is less hopeful. He sees a decline of 5 percent to 7 percent nationally -- more in highly stressed markets -- and doesn't foresee recovery until 2012.

"All in all, I expect 2011 to be another volatile year for real estate," Flint says. "Prices will fall, with the exception of a few cities, which will lead us out of this housing recession, and mortgages will become even harder to get. Mortgage rates will rise, though they will still be quite low in the historic scheme of things."

For consumers with jobs, that means improved housing affordability.

"For those who have the financial resources, this is the time to be in the market to take a look," says Nothaft. Those who can afford the larger monthly payment could find a 15-year-fixed, with rates closer to 4 percent than 5 percent, attractive.

"The problem is," says Flint, "even an incremental boost (in rates) will cause an increase in monthly mortgage payments for would-be buyers, and may even price out some out of the market."

While consumers who didn't get around to refinancing may be kicking themselves, it might still make sense. Even those whose homes have declined in value may qualify for the Obama administration's Making Home Affordable refinancing program. But don't wait -- it expires in June.

Findlay says that, particularly in periods of volatility, there is a great disparity in rates out there. Yet, a Harris survey commissioned by LendingTree found only 28 percent of respondents thought they got the best deal available; 40 percent had sought only one quote.

The bottom line, Findlay says: "It pays for consumers to shop around."

Bankrate has a comprehensive analysis of where all sorts of interest rates are likely headed in 2011, and how these moves will affect you. Go to 2011 Interest Rate Forecast to view the full report.

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