Car, Home and Credit Card Interest Rates to Increase

Interest rates are beginning to rise once again as the economy begins to take hold once more. This will place many consumers in a bind who are still struggling to make payments on things they own.

Economists are predicting that rates are being raised to prevent further inflation. Bill Gross of the investment firm, Pimco states, “Americans have assumed the roller coaster goes one way. It’s been a great thrill as rates descended, but now we face an extended climb.”

Fixed mortgage rates on 30-year home loans have have also gone up from under 5 percent to over 5 percent, which is the highest level they have ever been in the last eight months. Fixed rate mortgage averages increased to 5.21 percent a week earlier. Interest rates in August were at 5.29 percent and dropped to 4.71 percent in December of 2009. Economists are suggesting that rates will reach 6 percent, something Americans haven’t seen since 2008.

15-year fixed-rate mortgages have also gone up from lows around 4.25 percent to over 4.65 percent in many areas. The housing market is going to feel the effects of rising interest rates and they are not predicted to go any lower. Many consumers are now regretting not purchasing a new home sooner, and with the first time home buyer credit ending this month, home sales will go up dramatically.

Interest rates on credit cards have also increased to some of the highest rates since 2001. Get ready to pay more on car loans too, as rates for them have also increased.

Also of Interest Nearly 30% of Mortgages Are Underwater

We’ll be keeping a watch on interest rates for you and report here from time to time on the state of the economy as controlled by various interest rates.