Interest Rates Rising

Well, the Wall Street may have found bottom, or at least that is what is in the news nowadays. So why are interest rates on the rise?

The answer is simple, mortgages for the most part are not tied to stocks but bonds. Since investors believe that Wall Street has lost enough and there are so many bargain investments out there, Lenders are predicting a decline in the bond market and raising the rates. Today in Arizona, (which has a slightly higher rate than most of the country due to having one of the highest foreclosure rates) the interest rate fluctuate between 6.75% and 6.85%. It is expected to reach 7% by the end of the week.

So what does that mean if you are looking to buy a house? Well, your buying power is greatly reduced. Regardless of declining home values, it is better to buy now while interest rates are still historically low but time is running out and with more and more investors buying up bargain stocks, we can still expect to see mortgage rates rise.