Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights mortgage rates and the latest inflation expectations.
- The average annual inflation expectation in the U.S. over the next ten years remained relatively unchanged at 2.59%.
- Stronger inflation will put upward pressure on long term interest rates to increase. NAR is forecasting interest rates to increase to 5.6% by the end of 2011. The cost of financing a $170,000 home purchase with a 20% down-payment over 30 years would increase by approximately $600/year with a 60 bps increase in the mortgage rate.