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With mortgage rates rising recently, do you think I should lock in a rate now, or do you think rates will level off and possibly come down a bit in the near future?
-- Steve Moylan, Boulder, Colorado
Hold on for a minute while I consult my Magic 8-ball. You know, one of those big black grapefruit-size 8-balls you put a question to -- Will mortgage rates go up or down from here? -- and then you shake it up, turn it over and you get an answer like, "All signs point to yes" or "My sources say no."
Ah, if only divining the future path of interest rates were so easy. In reality, of course, predicting interest-rate movements is as difficult as picking winners in horse races (Go Smarty Jones! Win the Belmont!).
The overall trend
That said, however, there are times when the economic data is aligned in such a way that one can make pretty good guesstimates of what's likely to happen.
And I think now is one of those times. Over the past few years we've seen both inflation and long- and short-term interest rates sink to or near historic lows.
All of which means, I believe, that rates are more likely to head up than down from here. The 10-year Treasury yield has already climbed from 3.2 percent in June of last year to as high as 4.8 percent recently, and some bond-market watchers believe it could head as high as 6 percent over the next year or so.
Of course, neither I nor anyone else knows for sure how high rates will climb or even if they will rise at all for that matter. But it's no more likely that we'll see 10-year Treasuries move into the 5 to 6 percent range from here than that they'll stay where they are or sink.
Mortgage rates are likley to climb as well. Again, I don't know how far, but I wouldn't be surprised to see the same kind of increase that we see in short- and long-term Treasury rates.
So if you've picked out a house and are shopping for a mortgage -- or you're considering refinancing the mortgage on your current home -- I think it makes more sense to lock in a rate now than to gamble on the chance that rates will drop from here.
Similarly, if you're in the market for a home, now is the time to get serious if you really want to buy. While you're futzing around, rates could go up, which would mean a higher monthly mortgage payment.
That's not to say I think you should buy the first house you see or sign up with the first mortgage lender who sticks a contract under your nose. You still want to shop carefully for a home and make sure that you're getting a decent deal in a neighborhood with appreciation potential.
For tips on how to navigate today's housing markets and find the best mortgage rates, check out our Real Estate financing section.
You can also learn more about the ins and outs of rates commitments, closing fees and the like by checking out sites such as Bankrate.com and HSH Associates.
So that's my take on rates. But, hey, you don't have to act on my say-so. If you want a second opinion, there's always the online Magic 8-ball.
Walter Updegrave is a senior editor at MONEY Magazine and is the author of "We're Not in Kansas Anymore: Strategies for Retiring Rich in a Totally Changed World." He also answers viewers' questions on CNNfn's Money & Markets at 4:40 PM on Mondays.