Industry NewsMortgage

Expect a gentle rise in mortgage rates

Forecast puts 30-year fixed rate in high 6's by 2012

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Worries about the European debt crisis have investors flocking to relatively safe investments like mortgage-backed securities that are backed by the government, helping keep mortgage rates low.But economists with the Mortgage Bankers Association still think rates on 30-year fixed-rate mortgages are likely to rise into the high 6 percent range by the end of 2012, albeit on a more gradual slope than previously projected.In a June 11 forecast, MBA economists predict rates on 30-year fixed-rate mortgages will gradually rise to 5.4 percent during the fourth quarter of this year, reaching 6 percent in the last three months of 2011 and averaging 6.6 percent in the fourth quarter of 2012.In a previous May 12 forecast, MBA economists predicted the same endpoint -- rates averaging 6.6 percent by the fourth quarter of 2012 -- but with more of the increase coming sooner rather than later. The previous forecast projected rates on 30-year fixed-rate mortgages would hit 5.6 percent in the final three...