” ‘The job market has continued to improve, with the unemployment rate having declined further. At the same time, the recovery clearly rings far from complete, with unemployment still elevated and with both underemployment and long-term unemployment still major concerns,’ said Bernanke in a news conference on December 18. “
According to a Boston.com article, U.S. unemployment fell faster in 2013 than policymakers predicted it would, and the Federal Reserve foresees the U.S. unemployment rate going as low as 6.3 percent in 2014 and 5.8 percent in 2015.
Although chairman Ben Bernanke stated that loan rates would be kept low to stimulate spending, it has been widely anticipated that this $10 billion drop, slated to start next month, will mean a rise in home loan interest rates.
Reuters reported on December 24 that the Mortgage Bankers Association claims its index of mortgage application activity, including refinancing and home buying demand, fell 6.3 percent to the lowest level since December 2000. Loan requests for home purchases is a leading indicator of home sales and it fell 3.5 percent to its lowest level since February 2012, according to the Reuters article.
Economic analysts have been suggesting all year that a tapering of the U.S. stimulus would mean a rise to a 5% or more home loan interest rate in 2014. Has the recently announced tapering of bond purchases affected mortgage loan rates yet? Today, in Bloomberg.com’s Personal Finance page, John Gittelsohn wrote:
” The average rate for a 30-year fixed mortgage was 4.48 percent this week, up from 4.47 percent, according to a statement today from Freddie Mac. (FMCC) The average 15-year rate climbed to 3.52 percent from 3.51 percent, the McLean, Virginia-based mortgage-finance company said. “
We continue to watch the economy improve and still believe there are very good reasons that now is a great time to buy a home!
If you would like to know more about the Boston real estate market, please call me at 617-584-9790 or click the button below.
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Featured Boston Real Estate:
- 77 Worcester Street #4, South End – $1,449,000
- 559 Adams Street #2, Dorchester – $259,000
- 371-373 Dorchester Street #5, South Boston – $499,900