That’s good news for me because I am carrying $45,000 in credit card debt. If those interest rates went up, I’d be sunk. I can barely get by as things stand.
Home prices are expected to stay steady or to fall a bit in the next 12 months. And consequently there will be little demand for mortgages.
Rates on the 30-year fixed-rate mortgage are expected to average 4.4% next year, after averaging about 4.5% in 2011, according to the MBA’s forecast. Rates are expected to climb to an average 4.9% in 2013.
This expectation of low rates and low prices is part of what is keeping consumers standing pat.
“Consumers are pretty well in tune,” said Doug Duncan, chief economist for Fannie Mae, adding that they “have a good grip on the fact prices are not going to go up anytime soon.”
The housing market is in the fifth year of a 10-year adjustment in prices, said Duncan, who briefed reporters at the convention. He expects a 3% decline in prices from now until early next year, excluding distressed sales, with prices flat the rest of 2012.
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