Industry NewsMortgage

NAR: Fear of rising mortage rates could spur buyer demand

Fannie Mae economists predict rates will stay near 4 percent through 2013

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If mortgages rates are headed up -- and not everyone agrees that they are -- that could create a drag on housing markets, warns Lawrence Yun, chief economist with the National Association of Realtors.Rates on 30-year fixed-rate mortgage have been below 4 percent for 15 weeks, averaging 3.92 percent with an average 0.8 point for the week ending March 15, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey.Mortgage rates are largely determined by investor demand for mortgage-backed securities backed by Fannie Mae, Freddie Mac and Ginnie Mae. If the economy picks up, MBS may fall out of favor as investors shift money out of conservative bets like bonds and into higher-risk -- and higher reward -- investments like stocks. That would push bond yields and mortgage rates up. In a March 12 forecast, economists at Fannie Mae said they expect 30-year fixed-rate loans to climb slightly this year, averaging 4.1 percent during the second half of 2012, and cont...