Home Mortgage Rates Climb to 10.5 Percent: Economists Predict Continued Increases
Interest rates on fixed-rate home mortgages climbed to an average of 10.5 percent in December, their highest level since mid-August.</br></br>The December rates reflected an increase of about three-quarters of a percentage point since Nov. 2, when the area average was 9.75 percent, according to the Peeke Report, which surveys 110 Washington area lenders. Meanwhile, interest on adjustable-rate mortgages climbed to 8.13 percent from 7.75 percent.</br></br>In an unusual concurrence of opinion, economists for a variety of financial and real estate industry groups this week predicted that interest rates will continue to rise through the first half of 1989.</br></br>Generally, economists are predicting that rates on conventional 30-year, fixed-rate mortgages will peak between 11 percent and 12 percent before drifting downward.</br></br>The recent rate increases in the Washington area paralleled a 9.3 percent increase in conventional 30-year mortgage rates nationwide between Nov. 1 and Dec. 27, according to figures compiled by the Federal Home Loan Mortgage Corp.