NEW YORK – Jan. 7, 2015 – Housing economists seem less certain about mortgage rate direction in 2015 after getting it wrong last year.
Rates for 30-year mortgages ended 2014 at an average 3.87 percent, according to Freddie Mac, rather than about 5 percent, as commonly predicted at the beginning of the year.
As a result, mortgage rate predictions vary widely for 2015. Many prominent industry leaders once again expect rates to end at about 5 percent for the current year, but some observers now say they could remain low or even dip.
The Mortgage Bankers Association says it expects rates to rise because the Federal Reserve is likely to hike short-term interest rates by mid-2015.
“We expect that as the U.S. economy continues to grow, the Federal Reserve will raise short-term rates, and longer-term rates, including mortgage rates, will increase as a result,” says MBA chief economist Michael Fratantoni.
However, reaction to global issues will be the wild card. Many lenders are urging prospective buyers to act soon while rates are low.
Source: Los Angeles Times (01/01/15) Reckard, E. Scott
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