WHERE ARE INTEREST RATES HEADED IN 2014?

Where are interest rates headed in 2014?  That is one of the questions that we are often asked and it isn't an easy guess.  At Alaska Home Sellers we keep a watchful eye on not only what the local real estate market is doing, but combine it with forecasts from many local, state and national economic and financial reports to help our clients to better understand what it all means to our clients.  We do not have a crystal ball as to what the future holds, but we like to keep our customers aware of the factors in the marketplace that could have a bearing on their decision making process.  

The following information was pulled from a real estate blog that we watch:

"Most experts are calling for an increase in mortgage interest rates in 2014. However, we believe the increase will be more dramatic than is being projected. We believe rates will be closer to 6% than 5% by year’s end.

The Fed announced last month that they would be pulling back some of their stimulus package which has helped the housing market by keeping long term mortgage rates at historic lows for the last few years. This should come as no surprise as the real estate experts have been warning of this likelihood over the last several months.

Above are the most recent projections of where rates will be at the end of 2014 by the four major agencies. However, we believe that the government is not afraid to shoot right past these levels.

Doug Duncan, chief economist for Fannie Mae, this past summer announced: “I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.”

And Frank Nothaft, Freddie Mac VP and chief economist, at virtually the same time explained:  "As the economy continues to improve, we expect to see continued upward movement in long-term interest rates… At today’s house prices and income levels, mortgage rates would have to be nearly 7 percent before the U.S. median priced home would be unaffordable to a family making the median income in most parts of the country.”

Only time will tell. However, we feel that rates will be in the 5.75-6% range by year’s end."

Our personal opinion at Alaska Home Sellers is that there are monetary policies in place at the Federal Reserve that will keep mortgage interest rates at or near their current levels for much of the remainder of 2014, and would be very surprised to see them hit the 5.75-6% as stated in the blog.

As a Residential Finance Consultant (RFC) we have the tools to evaluate your personal situation to help answer the big questions:

• How's the market?
• Should I wait to sell my house?
• Is now the right time to buy?

To obtain a customized report created with your specific goals, give us a call at our office at (907)352-1828.  To find out an approximate idea as to what your home's value is in today's market, fill out this short form.

We have a tremendous amount of information on our website at www.AlaskaHomeSellers.com.  You can find information on communities, local schools, etc on there.  


We help clients understand the tax advantages, financing alternatives, and investment aspects of home ownership and why now is an incredible time to buy!

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