If you're floating an interest rate and waiting to grab a better one, it might be best to lock in now, according to one mortgage analyst.
Based on weekly surveys of lending institutions, Keith Gumbinger of Housing Data Reports, a firm that analyzes mortgage rates, says remarks by Federal Reserve Chairman Alan Greenspan have helped to boost mortgage rates and it's likely that rates may continue to rise.
"If you have the opportunity to lock in that interest rate, that's not a bad idea to do so," Gumbinger said. "Significantly lower interest rates as we go into the spring are unlikely. The probability is that interest rates have more space to rise right now than to fall."
The 30-year, fixed-rate mortgage according to HDR's survey has topped 8 percent. Freddie Mac reported that its 30-year fixed rate stood at 7.94 percent -- the third straight week it has risen and the highest it's been since early last October.
Gumbinger attributed the upward movement to Greenspan's remarks Fridayabout a "pre-emptive" action to curb inflation.
"The chairman, without specifically making a move has made a move," Gumbinger said, citing that rates had already climbed a quarter-percent during the last month. Consequently, Gumbinger is skeptical that the Fed will announce a rate increase after its Tuesday meeting.
If the Fed does nothing, Gumbinger expects rates to plateau and or fall slightly, "but don't expect them to fall back that quarter percent."
Pub Date: 3/23/97