are interest rates going to rise
1 For two years, mortgage interest rates have confounded the experts -- falling to new lows despite predictions they would rise. Top economists still expect rates to reach or exceed 4 percent by the year’s end and soar to 4.5 percent or even higher in 2017.  The reason? Remember, when the economy is struggling interest rates are kept low to stimulate growth. Mortgage rates were expected to rise sooner. But the Federal Reserve, headed by Janet Yellen, is balancing — not raising — rates too early to prevent harming a still delicate economy and housing market. The question on just about every bond investor's mind is simply this: When will interest rates rise? With rates on most types of debt near record lows, it seems that rates have nowhere to go but up. That would send bond prices down. Yun is also forecasting mortgage rates to end this year at 3.9 percent -- about where they were at the end of last year -- but will rise to 4.6 percent in 2017. Many events, including international financial instability and domestic mortgage demand, contribute to changes in mortgage rates. Let's say you buy a 1-year certificate of deposit that pays an interest rate similar to that of a savings account. If interest rates on savings accounts begin to rise, you're stuck with keeping the money in the lower-rate CD until the year is up. You would pay a penalty if you withdrew the money from the CD early to move it to a savings account. You may have had a savings account at the bank down the street since you were a child, but that doesn't mean it's the best place to keep your cash when interest rates rise. Financial institutions already pay different rates on savings -- one bank may offer a 0.01% interest rate, while another pays 1%. 7 tips for choosing a savings account when interest rates increase. March of the interest rates. It's been a tough road for savers over the past few years, but the Federal Reserve is finally giving them something to celebrate. On Dec. 16, the Fed increased the federal funds rate by a quarter percent. By Wendy Connett | August 20, 2014 — 10:30 AM EDT. Mortgage rates have been at historical lows since 2008 following the financial crisis, but the consensus is that they will rise; it's just a matter of how much and when. The average rate for a 30-year fixed-rate mortgage has fluctuated between just above 4% and 4.5% for most of 2014. The Federal Home Loan Mortgage Corp., or Freddie Mac as it is commonly called, is predicting rates will rise to 5% in late 2015. (For more, see: How To Shop For Mortgage Rates.) Interest rates on Treasury inflation-protected securities show that investors expect consumer prices to rise an average of 2.5% a year over the next decade, suggesting that the ten-year Treasury, which yielded 1.7% in early April, should yield about 5%. Why interest rates are going to rise. For two years, mortgage interest rates have confounded the experts -- falling to new lows despite predictions they would rise. Top economists still expect rates to reach or exceed 4 percent by the year’s end and soar to 4.5 percent or even higher in 2017.
Yes, if interest rates on savings accounts begin to rise.