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Experts: Say So Long To Mortgage Rates In The 3′s For Now

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By Kenneth R. Gosselin

But Carroll said that home builders do not believe they would be dealt a serious setback unless 30-year rates rise above 6 percent.

Carroll said that rising mortgage rates could actually spur more activity as buyers who have delayed are nudged into the market before rates potentially climb higher.

Official surveys of mortgage rates won’t be released until later this week, so it’s unclear to what extent Friday’s jump will figure into the averages.

Robert Bischoff, publisher of the Connecticut Bank Rate Recap in Clinton, said he is expecting a significant increase over last week.

“But these rates shouldn’t deter house hunters,” Bischoff said. “They’re still fabulous, just not the bargain basement of the past two years.”

Thirty-year rates between 4 percent and 5 percent are still below the 6 percent, even 7 percent, that were once considered rates to jump on, Neilson and others said.

The surge in the past month, experts say, has two primary causes.

First, Federal Reserve Chairman Ben Bernanke said in mid-June that the Fed might slow its purchase of mortgage-backed bonds, a strategy aimed at helping boost the housing market. The Fed’s purchase of billions of dollars in bonds has ensured that there is a secondary market for lenders to bundle and sell mortgages, keeping interest rates low.

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