The LA Times is reporting that mortgage rates may test the stability of the housing market in coming months:
Mortgage rates are continuing their creep upward in a trend that well may choke off a recent refinancing boom and provide a test of the strength of the housing market in 2010.
Freddie Mac’s widely watched survey found that rates averaged 5.14% this week on 30-year fixed-rate home loans for borrowers with good credit and a 20% down payment — or 20% equity for refinancings. That was up from 5.05% last week and slightly higher than at the same time last year.
With rates still considerably low, and the possibility of an extension in housing tax credits, this may be a good time to lock in a low interest rate.
With stimulus packages slated to continue throughout 2010, the possibility of interest rate hikes at the Federal Reserve is becoming more likely. Any such hikes in the The Federal Reserve’s rates would also boost mortgage rates higher.