The 30-Year, Fixed-Rate Mortgage Hovered At 3.35%
As 2012 heads into the sunset, we see mortgage rates continue to stay at near record lows. These low rates keep home affordability in check but even with the low rates many Bay Area (San Francisco, San Mateo County) homes have climbed above affordable levels with the rise in prices.
The 30-year, fixed-rate mortgage hovered at 3.35% for the week ending Dec. 27, down from 3.37% a week earlier and 3.95% last year, according to Freddie Mac’s Primary Mortgage Market Survey.
Overall, fixed-rate mortgages finished the year near all-time lows but what does 2013 have in store for interest rates?
Some people have compared prices and interest rates back to the 1980s displaying that despite the price increases it remains cheaper to buy a home now than back in for example 1987.
What Will Fed Chairman Ben Bernanke Do?
With the housing market continuing its upward rise, Fed Chairman Ben Bernanke may wish to keep interest rates low. Any significant jump might put the kibosh to the resurgent real estate market. We saw one example that if interest rates move up by 3 percentage points, a typical mortgage payment will jump by more than 40 percent. Something like that would surely cause prices to sink back down. Sure, many buyers have all-cash but not enough to drive the market.
What will happen in 2013? We will probably see a continuation of low rates and eager buyers. Have a healthy and prosperous 2013!