Interest Rate Alert: U.S. Rates Will Rise

[No DUplicitous DUpe]

cross post from GD:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8026412

[Warpy]

1. Excellent warning

If you need to borrow, do it now.

Interest rates do have to rise. Our creditors won't keep extending interest free gifts for much longer.

[upi402]

2. Expect to see 'owner carry contract' home sales again

These were popular in the early 80's. I bought and sold that way myself. Good income if you have equity in your house.

[steven johnson]

3. NYT: Era of low interest rates may be coming to an end

<<

Originally published April 10, 2010 at 8:35 PM


By NELSON D. SCHWARTZ

The New York Times


"Americans have assumed the roller coaster goes one way," said Bill Gross, whose investment firm, Pimco, has taken part in a broad sell-off of government debt, which has pushed up interest rates. "It's been a great thrill as rates descended, but now we face an extended climb."

The impact of higher rates is likely to be felt first in the housing market, which has recently begun to rebound. The rate for a 30-year fixed rate mortgage has risen half a point since December, hitting 5.31 last week, the highest since last summer.

Along with the sell-off in bonds, the Federal Reserve has halted its emergency $1.25 trillion program to buy mortgage debt, placing more upward pressure on rates.

The federal government, too, is expecting to have to pay more to borrow. The Office of Management and Budget expects the rate on the benchmark 10-year U.S. Treasury note to remain close to 3.9 percent for the rest of the year, but then rise to 4.5 percent in 2011 and 5 percent in 2012.

That tail wind, which prevented even worse economic pain during the recession, has ceased, according to economists, analysts and money managers.

"We've had almost a 30-year rally," said David Wyss of Standard & Poor's. "That's come to an end.">>


http://seattletimes.nwsource.com/html/nationworld/2011578673_rates11.html