We all the learned to follow the bouncing ball which normally flowed in a gentle arc as we sang through the song. Following the mortgage tune might have a sharper rise in pitch than we have grown accustomed to.
Mortgage rates were up sharply this week, bouncing back from record lows following the release of a better-than-expected jobs report, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey.
While forecasters expect rates on 30-year fixed-rate mortgages will stay well below 5 percent through 2012, strong economic growth could trigger a faster rise in long-term interest rates, including mortgages. Freddie Mac said rates on 30-year fixed-rate mortgages averaged 4.12 percent with an average 0.8 point for the week ending Oct. 13, up from 3.94 percent last week, an all-time low in records dating to 1971. At this time last year, the 30-year FRM averaged 4.19 percent before climbing to a 2011 high of 5.05 percent in February.
If 2012 is another year of slow economic growth, the MBA predicts purchase loan volume will again remain below 2010 levels, rising only slightly to $412 billion. Not until 2013, when the economy is expected to pick up steam and home sales and prices are expected to increase, will purchase loan demand show solid growth, increasing to $770 billion for the year, the MBA said.
If an economic recovery remains subdued, the MBA expects rates on 30-year fixed-rate loans will average just 4.4 percent during 2012 before climbing to 4.9 percent by 2013.
While mortgage rates continue to remain affordable, a crystal ball would be more helpful.
Source: Inman News