Mortgage rates are at historic lows, thanks to the European debt crisis. The average rate for a 30- year fixed loan as of mid-May 2010 is 4.87%, according to Bankrate.com-the lowest rate for the 30 years since Bankrate started keeping track 25 years ago.
Jumbo loan rates-loans above $417,000 have fallen too-to 4.5% on average for a 30-year fixed loan. That’s down from nearly 6% last year at this time.
Nervous European investors are seeking the security of US Treasurys-that pushes down their yield and influences multiple consumer interest rates including those on mortgages.
CNBC reports that Laurence Yun, chief economist at the National Association of Realtors predicts rates will increase to 5.5% by end of June. He adds that higher mortgage rates will be necessary to refinance the debt on the US deficit.