Mortgage Bankers See Home Mortgage Rates at 4.9 Percent in 2014
Rates for 30-year home mortgages likely will average 4.1 percent for 2013 and 4.9 percent in 2014, according to the Mortgage Bankers Association’s “MBA Economic and Mortgage Finance Commentary: August 2013.”
“We revised our outlook for the US economy this month,” the report began, “with slightly lower consumer spending and lower single family housing starts expected for the second half of the year. With continuing tension and unrest in Egypt, Syria, and other parts of the Middle East, we expect oil prices to remain high, holding back consumer spending.”
“Our outlook for mortgage originations remains largely unchanged,” the report continued, “but for slightly higher than expected home sales leading to more purchase originations in the third quarter of 2013 and refinance volume decreasing a little slower than expected. However, as mortgage rates continue their march towards 5 percent, which we expect will happen at the end of 2014, refinancing will continue to drop at a fairly rapid pace, since many borrowers have already locked in lower rates over the past year or so.”
“Home prices will continue to increase,” the report added, “and home sales indicators have showed that the inventory of homes for sale have started to grow again, both for new homes and previously owned homes. The MBA’s measure of credit availability, the MCAI, has showed that the supply of mortgage credit has increased for four months.”
These factors have led the MBA to predict more purchase activity, despite rising mortgage rates. “Purchase originations for 2013 will be around $619 billion and refinance originations will end the year at around $973 billion. Total originations for 2013 will be just shy of $1.6 trillion, a nine percent decrease from 2012,” the report concluded.
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