All throughout 2011 there were record low mortgage interest and that trend is likely to continue throughout 2012. Furthermore, the Federal Reserve has pledged to keep mortgage interest rates low through 2013.
Experts feel that there will be little incentive for potential homebuyers to return to the housing market due to high unemployment and continued home value price declines.
Last year's decline in 30-year fixed mortgage rates to historic lows did trigger a large wave of refinancings but not purchases. With lending standards remaining very tight home purchases may not improve much in 2012.
According to Freddie Mac just last week lenders were offering 30-year fixed-rate mortgages to good borrowers at an average of 3.95% which was the ninth consecutive week of rates at or below 4%.
Freddie Mac economists are predicting 2012's average 30 year fixed rate will be 4.5% and will increase to 5.4% in 2013; which is still amazingly low considering that back in 1981 and 1982 the average 30-year mortgage had an interest rate of more than 16%. As recently as 2000 the typical 30 year fixed rate was above 8%.
Thankfully, many economic experts feel that the housing market has hit bottom and has begun to heal but at a very slow pace and despite the fact that foreclosures and other distressed home sales are keeping home prices from rising, home prices should stabilize this year. Also, inventory of new homes is at a nearly 50-year low which may further set the stage for a housing market rebound.