Mortgage Rate Predictions For 2014
Predictions for 2014: Interest Rates Will Increase Significantly
Posted: 08 Jan 2014 04:00 AM PST
Most experts are calling for an increase in mortgage interest rates in 2014. However, we believe the increase will be more dramatic than is being projected. We believe rates will be closer to 6% than 5% by year’s end.
The Fed announced last month that they would be pulling back some of their stimulus package which has helped the housing market by keeping long term mortgage rates at historic lows for the last few years. This should come as no surprise as the KCM Blog has been warning of this likelihood over the last several months.
Mortgage Rate Projections
Analyst Projected Rate 4Q 2014
Fannie Mae 4.8%
National Assoc of Realtors 5.3%
Feddie Mac 5.0%
Mortgage Bankers Assoc 5.3%
Above are the most recent projections of where rates will be at the end of 2014 by the four major agencies. However, we believe that the government is not afraid to shoot right past these levels.
“I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.”
"As the economy continues to improve, we expect to see continued upward movement in long-term interest rates… At today’s house prices and income levels, mortgage rates would have to be nearly 7 percent before the U.S. median priced home would be unaffordable to a family making the median income in most parts of the country.”
Only time will tell. However, we feel that rates will be in the 5.75-6% range by year’s end.