San Jose Mercury News
From the article:
SAN JOSE -- A leading housing economist predicted Thursday that recent increases in mortgage interest rates will level off next year and housing sales across the nation will remain strong.
"We see prices continuing to rise and we expect rates to be about 5.1 percent maybe up to 5.25 percent," said Ken Fears, economist with the National Association of Realtors.
Fears spoke at the Santa Clara County Association of Realtors annual convention here, the association's first since the housing market crash five years ago.
Fears noted that more than a year of falling interest rates was reversed in May with concerns over an end to the Federal Reserve's program of bond buying, which has helped keep interest rates down.
Mortgage rates have increased more than a percentage point since May, although Thursday, they dropped to 4.5 percent from last week's 4.57 percent, according to a report from Freddie Mac, one of the two government-controlled entities that buys mortgages from lenders.
Meanwhile, sharply rising prices have pulled more homeowners out from underwater on their mortgages -- where homes are worth less than is owed on them, Fears said.