October 29, 2010 (Shirley Allen)
Inevitably someone has to try, but barring any big announcement from the Federal Reserve or some incident that jolts the economy, the Mortgage Bankers Association (MBA) predicts rates on 30-year fixed–rate mortgages will climb to 5.1 percent by the end of 2011.
Jay Brinkmann, chief economist of the MBA, said he expects applications for mortgages to purchase homes to stay about the same as they were in 2009, higher than 2010, but refinances should drop.
Total mortgage volume is expected to be nearly $1 trillion in 2011, down from an anticipated $1.4 trillion this year and nearly $2 trillion in 2009.
High reliable are these predictions? Let’s not forget that most economists in the beginning of 2010 predicted that rates would be higher at the end of the year then at the beginning of the year. It was not unheard of to hear some predictions of rates being in the 6% range.
However, a “jobless” recovery, a sluggish economy, and the continuing foreclosure crisis quelled any possibility of that and consequently rates have continued to hover all year long at historic lows.