According to the National Association of Realtors and CNNMoney.com, mortgage rates around 4.42 percent will likely remain the lowest rate we will see in a long time as rates continue to up-tick since November of 2010. The National Association of Realtors states that, "Bankrate.com recently reported a rise to 5.02 percent in 30-year fixed rate loans, which is the second time in three weeks rates have crossed the 5 percent mark--many experts say signaling the end to the 4 percent mortgage rate era".

Mortgage rate forecasters predict that mortgage rates for 2011 are likely to flux between 5 and 6 percent, while other experts speculate that a rise in mortgage rates could help simulate the market.

Will the rise in interest rates create some urgency for buyers to purchase homes or will consumers continue to wait on large purchases? It's too soon to know whether the rise in rates will cause consumers to buy before rates get any higher and mortgages become more expense.
Recent market trends have been everything but typical, so only time will tell.

Chief economist at Bankrate.com, Greg McBride, told CNNMoney.com "When rates rise 4.25 percent to 5 percent, it takes away 9 percent of the purchasing power of buyers".

On the other hand, Lawrence Yun, Chief economist of the National Association of REALTORS®, says he doesn't foresee a moderate hike in mortgage rates as a negative for the industry. He says, "The real mortgage challenge is getting lenders to approve creditworthy buyers for a loan".

(Source: National Association of Realtors, CNNMoney.com).

"It's less about rates than it is about underwriting standards ... If lenders return to more normal, safe underwriting standards for creditworthy buyers, there would be a bigger boost to the housing market and spillover benefits for the broader economy," Yun said.

(Source: National Association of Realtors, CNNMoney.com).

To read more visit: http://money.cnn.com/2010/12/30/real_estate/mortgage_rate_spurt/index.htm

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