This year’s housing market isn’t likely to be as exciting as last year. Many analysts are projecting interest rates will climb over the next 12 months and may affect mortgage application and refis. Others claimed that the interest rate is not expected to rise and that the Fed will keep a tight leash on rates through 2014, either way, we know that it is bound to change, and whatever change it is, we must brace ourselves.
Interest Rate Hike
There’s a good and bad side on this. The good side, even if the rate goes up, it is still low compared to historical norms. The rising interest rate will put a damper on refis, and the refinance businesses may potentially lose their lending standards making it easier for home buyers to get a mortgage. The bad side; with high interest rate, it will be more expensive to finance and may cause homeownership rate to fall.
We are not sure yet how the rates will unfold and how will it affect the housing market. To dig the issue more let’s take a look on this report published by Housing Wire: