Where are Those Mortgage Rates Going in 2013?

Filed under: Market Comentary, Mortgage Rates

mort ratesDue to the housing market showing definite signs of rejuvenation, numerous experts agree that the coming spring homebuying season could be a busy one for both sellers and buyers. Most buyers and sellers are anxious to know where the mortgage rates are going to go this year. Here are few things to consider.

So, what is the outlook for 2013? According to Keith Gumbinger, vice president of a mortgage tracking¬†website, it’s probably best to expect rates to be above record-low bottoms, and the improving economy will likely raise the rates to a degree this year. Potential homebuyers should probably expect a 30-year fixed rate mortgage to generally hold at the approximate rates for most of the year. However, if growth or inflation increase, rates could rise above what they currently are. Most likely, buyers will see the lowest rates before midyear, as the economy is affected by the fiscal cliff tax and spending deals. This means that the spring purchase season should fare well.

Now if the rates begin to rise, how quickly might this happen? Since the Federal Reserve committed to keeping rates both low and stable, a huge swing in rates in highly unlikely, and although rates can be expected to rise a little, they should only move at a measured pace.

Are there any external factors to keep an eye on to see what direction the rates may go? Understand that the record low rates we have seen are the result of a combination of a weak domestic economy, aggressive Federal Reserve policies, and a strong flow of money from overseas as investors tried to get out of the way of declining European economies. So, any improvement or change in any or all of these factors will tend to lift rates.

With the home sales numbers looking encouraging, is the housing slump finally over? The good news is that most agree that we have ‘turned the corner’ on housing, that home building is gathering strength, sales of both new and existing homes have been solid for a number of months, and home prices are on the rise. It will still take some time before all of distressed homeowners and markets are a thing of the past, but it’s encouraging to see the move away from the depths of the housing crisis.

So from this, it definitely looks like we are going in the right direction! If you have any questions about anything related to the mortgage world, please call me to discuss your what is on your mind.


Franklin Loan Center | NMLS 237653
Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, 4131316
For questions or concerns please email info@franklinlc.com