The MBA says that it expects interest rates to rise to 4.4 percent by the end of this year, and climb to 5.1 percent by the end of 2011 - a sharp turnaround from rates of 4.25 percent last week. The group says that potential action by the Federal Reserve intended to spur the economy won't affect interest rates to a great degree.
"The market has already priced these anticipated actions into today’s rates," said Jay Brinkmann, the chief economist for the MBA. "In other words, absent some blockbuster post-election announcement from the Fed on November 3rd, we do not expect to see a further decline in rates."
Potential homeowners encouraged by falling home prices, however, will see that trend continue in the coming months. A survey of more than 100 economists by Macromarkets earlier this month found that half of them don't expect prices to rebound before next year, while the rest say a price recovery won't take hold until 2012 or later.
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