RTC Mortgage Blog

2012 / 2013 Real Estate and Mortgage Summary

We enter the New Year with a lot of optimism surrounding the real estate and mortgage markets. Taking a look back at 2012, the highlights were many and they were encouraging. The New Year should bring further optimism.

2012:

In real estate we experienced these highlights:

• Purchase’s increased
• Home values increased
• Rents Increased
• Inventory decreased dramatically contributing to higher prices
• The Short Sale process improved
• The Fiscal Cliff was avoided and the Mortgage Interest deduction was preserved

Mortgages also experienced significant improvements throughout the year. The highlights are:

• Interest rates decreased further
• The Fed enhanced its commitment to buy MBS’s by increasing its monthly purchase program to $85 billion
• The Fed promised to keep interest rate low until the unemployment rate hits 6.5%
• More mortgage products and lenders in the form of jumbo loans, HELOC’s & loans for foreign buyers.
• Mortgage brokers continue to gain market share

2013:

Looking forward into the real estate market, we expect some improvement in inventory as fewer owners are underwater and able to put their homes on the market. And, if job confidence continues to improve we should also see more move-up buyers. Both of these scenarios will also contribute to higher prices.

In the mortgage market, expect:

• Slightly increasing rates but probably still under 4%
• Fewer refinances and more purchase transactions
• More products and lenders entering the market
• Mortgage Brokers will continue to gain more market share
• More regulation – see the article on “Qualified Mortgages”