Predictions for 2014: Interest Rates Will Increase Significantly
Industry Experts Predict Rise in Interest Rates
Most experts are calling for an increase in mortgage interest rates in 2014.
The Fed announced last month that they would be pulling back some of their stimulus package which has kept long term mortgage rates at historic lows for the last few years.
Fannie Mae Prediction
Doug Duncan, chief economist for Fannie Mae, this past summer announced:
“I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.”
Freddie Mac Weighs In
And Frank Nothaft, Freddie Mac VP and chief economist, at virtually the same time explained:
“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, the common wisdom suggests we plan on rates increasing. When you decide whether this is the right time to buy, consider the effect of a higher monthly cost in the future.