Record Low Rates May Be Behind Us
Mortgage applications slow as rates rise
Mortgage applications fell in mid-October to their lowest level since August. At the same time, Zillow’s Mortgage Marketplace reported a slight increase in the rate for a 30-year fixed mortgage — up 2 basis points from 3.26 percent to 3.28 percent.
MBA sees Fed policy supporting slow rise in rates
The Mortgage Bankers Association (MBA) is predicting an average rate of 3.8 percent for 30-year fixed mortgages in the fourth quarter, rising to 3.9 percent in the first quarter of 2013 — with a steady, slow rise to land around 4.4 percent by the fourth quarter of 2013. Jay Brinkmann, the MBA’s chief economist, thinks “continuing purchases of mortgage-backed securities through the Federal Reserve’s QE3 program will likely keep the 30-year fixed-rate mortgage below 4% through the middle of 2013.”
International economy impacted rates more than expected
According to Brinkmann, factors economists normally expect to drive interest rates, such as inflation, were less significant than other factors —
“it was uncertainty in European economies and actions taken by the Federal Reserve that moved rates so low this year.”