3/17/2005

Mortgage Rates Rise to 6%

As rates rise, borrowers increasingly use ARMs (adjustable rate mortgages) with the lower rates for a fixed period of time or those with extremely low start rates. Those ARMs help get the buyer into an much more expensive home--it's a chicken vs. the egg story with high home prices on the one hand, and lower rates on the other hand that helped keep those home prices high. On the one hand, rates have maintained 40-year low, on the other hand, homes haven't ever been this expensive. Does this mean there's a bubble? As long as we have jobs, retail sales, housing starts and continued employment, the picture for higher prices with real estate is likely to remain. Mortgage rates, CD rates, auto loans, credit cards, mortgages, personal finance advice and more

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