If you are fence sitting about whether to buy that house, you may not want to wait too much longer: If government officials can be believed, the more than year-long federal support of mortgages, which brought rates to post World War II lows, is slated to end within the next couple of months.
Should this happen, mortgage rates are expected to climb. By how much, no one seems certain. Though fears are already being expressed by some, that any hefty increase in the 30-year fixed rate mortgage could cut any developing real estate market recovery off at the knees.
But forget the macro implications and let's keep to the micro ones: that would be you.
Right now, interest rates on 30-year fixed rate mortgages are around the 5% mark or slightly higher.
In case you have forgotten, or didn't know, that rate was as high as 6.04 % only back in the fall of 2008, before the government started buying up mortgage-related securities.
"We did what we thought was necessary to stabilize the market, but we don't think the government should continue special efforts forever," assistant U.S. Treasury secretary Michael Barr tells the Washington Post.
Now, as I said, not everyone thinks the feds will carry through with the plan to pull out of the mortgage securities market.
Even a few months ago, one credit advisory blog expressed skepticism: "Will the Fed stop buying mortgages and mortgage backed securities, come this April?" No, concludes the Bad Credit Advisor blog. " ...unless, of course, the Fed wants interest rates to rise, home values to fall and the economy to suffer even more."
But if you are seriously thinking about plunging into the home buying market, do you want to chance ending up on the wrong side of a bet? That by waiting a few more months, maybe rates will come down even more?
The only thing for sure is this: right now, mortgage rates are still very low by historical standards. If the skeptics are wrong and the government goes ahead and pulls the plug on its mortgage-rate initiative program this spring, many economists fully expect mortgage rates to rise.
If you have the job, the money, the credit line and the home of your dreams in sight, my question to you is: what are you waiting for?
Charles Feldman is a journalist, media consultant and co-author of the book, "No Time To Think-The Menace of Media Speed and the 24-hour News Cycle." He has blogged about real estate matters for several years.
Mortgage rates expected to rise as government support phases out