Interest rates have been very low now for a long time. This has been partially because of the Federal Reserve Bank buying $85 billion in bonds every month. The Fed are finally confident enough about the recovering economy that they are scaling this back a little.
Interest rates are likely to rise during 2014. We have been saying this for the last 2 years of course, but now it seems likely to be true!
Today I was with 4 lenders, who projected likely year end 2014 rates to be between 4.75% and %5.25. The one projecting 5.25% believes the economy will do well in the next year. I am tempted to agree with him.
Tighter Government lending rules will probably reduce the purchasing power of buyers from January 10th 2014. So, combined with higher rates, the amount that a buyer will qualify for, will most likely be lower in 2014 than it would have been in 2013. That's just a fact of life.
If you are wondering how this affects YOU, call me on 949 584 7289.
