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Where Are Mortgage Rates Headed?

We are often asked where we think mortgage rates are headed over the next year. The best people we can go to on this issue are the people who deal with it on a daily basis – The Mortgage Bankers Association (MBA). Here is what was reported by MarketWatch in a recent article:

“After reaching record lows in 2012, mortgage rates are expected to creep up slowly in the year ahead, the Mortgage Bankers Association predicted.

Rates on the 30-year fixed-rate mortgage are expected to average 3.8% in the fourth quarter of 2012, rising to 3.9% in the first quarter of 2013 and eventually rising to an average 4.4% by the fourth quarter of next year.”

If the MBA is correct, mortgage interest rates could inch up almost a full percentage point in the next year. Tomorrow, we will explain what that means to a potential buyer.

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2 replies
  1. Mike
    Mike says:

    With a quick perusal of the Mortgage Bankers Association website I can tell you the following. Here is what they predicted our current mortgage rates would be in their predictions from the last 3 years:

    Oct 2009 prediction for Q3 2012 = 6.3%

    Oct 2010 ” ” ” ” = 5.7%

    Oct 2011 ” ” ” ” = 4.5%

    Actual rate for Q3 2012 = 3.5%

    If we haven’t learned anything else in the last decade we should have at least learned to be wary of “experts” predictions.

    Despite posting this I can say that Steve the the KCM crew give their best advice when they say to purchase a home because of the benefits to you and your family rather than someone in the mortgage or real estate industry giving you stats and predictions about where interest rates or home prices are headed. They, much like the experts, are trying to predict something they have shown little ability to predict.


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