Freddie Mac’s Nothaft tells loans.org Interest Rates May Rise in 2013

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Frank Nothaft, Freddie Mac’s vice president and chief economist, told loans.org that interest rates may rise in 2013 given some foreseeable changes to the Fed’s bond buying program. However, Nothaft said that homebuyer affordability should continue to remain very high.

There may be some easing on the Fed’s bond buying program, which will be a contributing factor to the rise in rates toward the end of 2013

Mortgage rates are currently at a 65-year low. As 2012 comes to a close, homeowners and mortgage specialists alike are curious to know where these historic rates are headed. To answer that question, loans.org spoke with housing giant Freddie Mac.

In an exclusive interview with Frank Nothaft, Freddie Mac’s vice president and chief economist, Nothaft told loans.org that “homebuyer affordability should remain very high in 2013 for those potential buyers with good credit history, stable income and sufficient savings.”

But despite that affordability, the record-low interest rates we’ve seen throughout 2012 may not last. While mortgage interest rates should remain extremely low in the beginning of next year, they are expected to increase slightly come the later part of 2013 as a result of some foreseeable economic conditions.

“With positive signs of economic and housing recovery in recent months — albeit tempered with some cautionary notes — there may be some easing on the Fed’s bond buying program, which will be a contributing factor to the rise in rates toward the end of 2013,” Nothaft said to loans.org.

While the predicted increase in mortgage loan rates is expected to be a result of healthy economic factors, at least one negative economic shift will occur as a result: less refinancing.

“When mortgage interest rates are low, homebuyers are more likely to refinance,” said Rebekah Coleman with loans.org. “[But] the latter half of 2013 is predicted to bring slightly higher rates, and with it less refinancing.”

For additional comments made by Nothaft, please visit loans.org’s complete analysis of where mortgage rates are headed in 2013 at http://loans.org/mortgage/articles/peering-into-future-home-interest-rates.

For more articles, news, and FAQs regarding the mortgage loan industry, please visit http://loans.org/mortgage.

About Loans Org, LLC:

Loans Org, LLC is the parent company of loans.org, a leading lending authority website that covers financial news, produces informative articles, and answers frequently asked questions. In addition to providing lending-related information, loans.org also hosts a variety of free online application forms for prospective borrowers to use when applying for loans.

For more information, please contact:
Alex Gomory,
Editor, Project Manager
alex(at)loans(dot)org
+1-909-784-2476
SOURCE: Loans Org, LLC

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