Mortgage Rates Forcasted to Move Higher in 2014 and 2015

Average mortgage rates in the most recent Primary Mortgage Market Survey (PMMS) released by Freddie Mac changed little this week. For the entire 2013 year, mortgage rates have gone up from record lows set earlier in the year. Average 30 year conforming mortgage rates are at 4.48 percent with 0.7 point, an increase from last week's average 30 year rates of 4.47 percent.

A year ago at this time, 30 year rates averaged 3.35 percent, which was the lowest point for average 30 year rates in 2013. Looking forward to 2014, average mortgage rates on all loan types will be moving higher all year long.

Mortgage Rates Forecasted to Move Higher in 2014 and 2015

In the most recent Mortgage Finance Forecast released in December by the Mortgage Bankers Association, average 30 year rates are forecasted to increase to 4.7 percent in the first quarter of 2014. By the end of 2014, average 30 year mortgage rates are forecasted to move above 5.00 percent to around 5.10 percent on average.

The forecast for mortgage rates in 2015 is also higher, though rates are expected to remain under 6.00 percent. In the first quarter of 2015, average 30 year rates are expected to be around 5.10 percent and by the end of 2015, average 30 year rates are expected to increase to 5.30 percent.

Average Mortgage Rates

• Mortgage rates today on 30-year fixed-rate mortgage loans are at 4.48 percent with an average 0.7 point, up from last week when it averaged 4.47 percent.


• Today's mortgage rates on 15-year fixed-rate mortgages are averaging 3.52 percent with an average 0.7 point, up from last week when it averaged 3.51 percent.


• Current mortgage rates on 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) are averaging 3.00 percent, up from last week when it averaged 2.96 percent.


• Mortgage rates currently on 1-year Treasury-indexed adjustable mortgages are averaging 2.56 percent, down from last week when it averaged 2.57 percent.

Now is a Good Time to Buy a Home

While rates are moving higher and will continue to move higher overall, the increases are not that bad. This is a good thing because the housing market is still recovering and any large increases in mortgage rates will certainly derail the recovery.

If you're thinking about buying a home, now is one of the best times in over a decade. Since the housing collapse, housing prices have come down considerably.

Another factor making now a good time to buy is low mortgage rates. With current mortgage rates on 30 year loans averaging around 4.50 percent, you can still find lenders quoting 30 year rates for home purchases below the average. The lowest 30 year mortgage rates in our database of rates are at 4.00 percent with points.

Now is a Good Time to Refinance a Mortgage

Already own a home and have been thinking about refinancing your mortgage? Because refinance rates are still very low, you should look into refinancing. Because home prices on average moved 20 percent higher the past 2 years, you might be able to refinance now because you may have built up enough equity in your home.

Refinancing to a shorter term loan if you can afford the higher monthly payments is one of the best ways to save money. Refinancing from a 30 year loan to a 15 year loan will probably save you hundreds of thousands of dollars in mortgage interest payments. Literally.  Likewise, refinancing from a 30 year loan to a 10 year loan or even a 15 year loan to a 10 year loan will also save you a great deal of money.  The clincher is that you will have somewhat higher mortgage payments but the shorter term and lower interest rates make a huge difference in the total amount you pay for your home.

You can use a mortgage calculator with interest and an amortization schedule to see how much you can save in interest.

Loan Type

Purchase Refinance with Cash out Refinance

State

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FICO Score

Superior (780-850) Exceptional (760-779) Excellent (740-759) Very Good (720-739) Good (700-719) Above Average (680-699) Average (660-679) Fair (640-659) Need Improvement (620-639) Poor (350-620)

Loan Amount

$

Points

Up to 0 points Up to 0.5 points Up to 1 points Up to 1.5 points Up to 2 points Up to 2.5 points Up to 3 points

LTV

%

Loan Term

 15-Year Fixed  20-Year Fixed  30-Year Fixed  5-Year ARM  7-Year ARM  10-Year ARM

Mortgage Rates December 11, 2023