HBI’s Mortgage Rate Forecast for 2013

Welcome to the mortgage rate forecast section of the Home Buying Institute. Below, you’ll find our latest forecasts and commentary regarding the lending industry in general, and 2013 mortgage rates in particular. Short on time? At the very least, check out our 50-word forecast summary below. It gives you a general idea of where rates might be headed in 2013.

This Page Has Been Archived; See New Forecast Below

In December 2013, we placed this page into an archive status. That means it will no longer be updated. We have a new forecast page for 2014.

Note: The rate forecast above, and the table shown below, are based on average mortgage rates. The actual rate you receive from a lender will depend on your individual qualifications as a borrower. This includes such things as your credit score, down payment, debt level, and loan-to-value ratio (LTV). The averages are useful in that they establish a baseline, making it easier for you to spot a ‘good deal’ on a home loan. They also help you determine which way rates are moving at any given time.

How We Forecast Mortgage Rates

The mortgage rate forecast above is based on a variety of indicators and insight. First, we look at current mortgage rates (above) and rate trends for the last six weeks. Next, we consider a variety of economic indicators such as inflation, GDP growth or contraction, employment rates, and actions taken by the Federal Reserve. We also listen to the experts — economists and market analysts who have their fingers on the pulse of the mortgage market. Based on all of this research and monitoring, we serve up our 50-word mortgage rate forecast for the next few months. It’s about as ‘scientific’ as one can get, given the fickle nature of the economy and the evolution of individual markets.

Recent Trends, Comments and Commentary

Is the Federal Reserve ready to taper its long-running stimulus program? That’s the general consensus among economists and housing analysts. John Williams, president of the San Francisco Fed, recently told Bloomberg Television: “If the data continue to progress as we’ve seen, then I do agree that we should edge down or taper our purchases later this year.” What does this have to do with our 30-year mortgage rate forecast? Plenty. The stimulus program, known as QE3, helped keep mortgage-lending rates near record lows for months. A reduction in the Fed’s asset purchases (commonly referred to as tapering) would likely lead to a rise in rates. We have seen the early effects of this already, with the mere mention of tapering. As a result of the Fed’s direction, along with general improvements in the economy, our 2013 30-year mortgage rate forecast calls for gradually rising interest rates over the next few months. This could slow the housing recovery that is now spreading across the country. Forecasts published by both Freddie Mac and the Mortgage Bankers Association (MBA) also call for gradually rising rates between now and the end of the year.

The Obligatory Disclaimer

This article contains forward-looking statements about mortgage rates in the United States. This information is provided for educational purposes only. Our forecast is a compilation of comments and predictions made by third-party experts, combined with our own views. For instance, we routinely use the Housing Forecast report published by Fannie Mae each month. We also compile the remarks made by a large number of economists and analysts. We make an educated guess based on all of this information, and serve it up in a concise, 50-word format. The mortgage predictions and forecasts made on this page are, in essence, a distillation of many voices. Rate forecasts are made based on current conditions in the economy, and within the housing and home-financing industries in particular. Economic conditions can change rapidly, based on any number of factors (the debt crisis in Europe is a good example). As a result, the accuracy of mortgage rate forecasts largely depends on the stability of the economy as a whole. Please do not make any financial or investment decisions based solely on the information presented above. We encourage you to continue your research well beyond this website, to get a broader sense of what is truly happening in the mortgage world.

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