November 30th, 2012
Fiscal cliff concerns have had a small impact on various markets, such as the mortgage industry. One main effect the federal budget concerns have made on the sector is on mortgage rates.
Mortgage rates have remained largely unchanged, with those for 30-year fixed-rate mortgages averaging 3.32 percent for the week ending November 29, up slightly from 3.31 percent the previous week, according to Freddie Mac. Those for 15-year fixed-rate mortgages also experienced a slight increase to 2.64 percent compared to 2.63 percent.
“Mortgage rates were virtually unchanged this week amid growing concerns around the fiscal cliff,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Although low mortgage rates failed to boost new home sales in October, year-to-date sales are up 20 percent compared with 2011 volumes, and there are growing signs of a turnaround in house prices.”
While low rates may have been instrumental in encouraging some buyers to enter the housing market, many are waiting for home prices to drop lower. However, many analysts have argued that home prices have bottomed out, and those who want to obtain the most affordable terms may need to start the mortgage process in the near futures. Industry analysts have predicted that affordable terms will remain consistent through 2013, during which time mortgage service companies are expected to experience a large boom in business.