Average rates on U.S. mortgage loans fell close to all-time lows in the first week of 2013 and analysts believe that will be a lasting trend for this new year.
The 30-year fixed rate conventional mortgage loan rate slipped to 3.34 percent, excluding points, during the week ended January 3, down from 3.35 percent the previous week, according to Freddie Mac. The lowest rate on record is 3.31 percent, from the week of November 21. The average rate on a 15-year fixed rate mortgage dipped to 2.64 percent from 2.65 percent.
“Mortgage rates started the year near record lows which should continue to aid the ongoing housing recovery,” said Frank Nothaft, Freddie Mac vice president and chief economist in a press release. He pointed to a two-year high in new homes sales in November and an increase in pending home sales as more good news for the housing market.
Others agree with his assessment. Fannie Mae chief economist Doug Duncan predicts that there will be no major rate increases soon.
“As expected, the Federal Open Market Committee’s action last week shifts monetary policy into cruise control, as long as the unemployment rate remains elevated and inflation stays under control. We expect mortgage rates to remain low next year, continuing to support the housing market,” Duncan said in a statement.
And low mortgage rates will be one part of a healthy and rebounding market this year.
“Despite unsteady macroeconomic conditions, we anticipate housing and mortgage activity to gain momentum in 2013,” continued Duncan. “…Total home sales should increase by approximately 8 percent in 2013, following an estimated 10 percent rise in 2012. Although home prices have dipped during the seasonally weak fall and winter seasons, year-over-year gains have strengthened significantly above 2011 levels, and we expect that trend to continue in coming years.”
So while the unemployment rate may continue to remain and GDP may not grow quickly, “the housing market has stayed resilient and continues to show signs of a strong, sustained recovery.”