I hope everyone had a wonderful holiday season and wow – it's 2013!!!! So what's going to happen this year? Are interest rates going to go up, stay the same? Drop? It's impossible to know for sure but we have some guesses!!
The "fiscal cliff" has come and Congress did pass a bill to stop most of the changes. Wednesday the stock market reacted quickly and soared. The DOW jumped by 308 points! However, that didn't help interest rates. As usually happens, when the stock market improves, the bond market takes a hit and that means interest rates increase.
Mortgage rates tumbled in 2012 as most of us know. When 2012 started, most of us believed rates would have stayed the same and maybe slightly increased – I don't know that any of us expected interest rates to drop like they did. In 2013, we can expect rates will slowly increase. The reason rates have stayed low is due to the economy, political uncertainess and high joblessness. Those reasons are slowly subsiding and so Wall Street will likely improve, which will lead to higher interest rates.
Mortgage rates averaged 3.66 percent throughout 2012. Mortgage rates are more than historically-low — this is the lowest ever! Expect that in 2013 mortgage rates will increase (I know I said that a year ago too!!), no one knows what they will increase to, but I don't think they will drop again!!
If you are thinking about buying a home or refinancing, now is definitely the time. We are seeing home prices increase and if interest rates also increase, this is the best time to buy. You will be able to qualify for more home now than you will in the future. We never know we are at the bottom until rates start to increase, what we do know now is that rates are great!!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage and Equity Consultants – Email – Website
