Fixed rate loans have been predicted to rise to 4.5% by the end of 2014. According to the October forecast by the MBA, the mortgage rates will stay fairly consistent throughout the next couple of years and will make a slow progression to 3.8% at the end of the year.
In 2013, the rates have been predicted to be 4.1%. Although this represents a slow and gradual rise in the mortgage rates, if we keep the general trends in mind, these rates are at the lower end of the spectrum.
While this prediction is a ray of hope to many homeowners, the overall economy of the country will play an important part. The refinance activity has increased in the past few months and the number of new foreclosures has slightly decreased. What remains to be seen is how the government tackles the unemployment problem.
If unemployment rates decrease consistently and at a faster pace, a full recovery can be expected in the housing sector. However, if unemployment persists, people will be more careful about making purchases and taking out new mortgages. Not to mention, it’s not easy to qualify for a new loan these days.
Increased employment opportunities will also help struggling homeowners. The MBA predicted that mortgage refinance loans would increase by 760 billion dollars in 2013, and home purchases will rise by 16%. All these predictions are based on the premise that the current policies and legislations will be continued in the next couple of years.
Keeping the MBA predictions in mind, it can be stated that the economy and the mortgage sector are on a slow path to recovery, and full recovery can be achieved in the next few years. However, given the ever changing global economic trends, and the political unrest in some regions of the world, it cannot be assumed that the same economic policies will be continued.
Homeowners suffering from financial setbacks and facing foreclosure should seize the current opportunities at hand, and should take action while interest rates are low. You can contact the foreclosure defense attorneys and loan modification attorneys in Amerihope Alliance Legal Services, and are encouraged to get a free consultation. We are looking forward to your feedback.