mortgage

2014 mortgage rates forecast

Mortgage rates ready to rise

Homeowners and potential homebuyers will face higher rates in 2014. How high will rates go? That will depend on the Federal Reserve and how the economy performs.

The Mortgage Bankers Association expects the 30-year fixed rate to rise to about 4.8 percent by the second quarter.

The Fed has reduced its $85-billion-per-month bond-purchasing program to $75 billion and may continue to trim the program. The tapering was somewhat expected by investors, but rates are likely to climb as the Fed keeps scaling back on the bond purchases.

"If the Fed is able to taper and eventually stop buying bonds and the economic recovery gains steam, mortgage rates could move above 5 percent and stay there," McBride says. "But anything short of hitting both of those marks and mortgage rates will spend more time below 5 percent than above."

The Mortgage Bankers Association expects the 30-year fixed rate to rise to about 4.8 percent by the second quarter of the year, reaching 5 percent in the third quarter, according to the MBA's latest forecast.

That gives potential buyers time to shop for a home and still grab a low rate, but don't waste time.

"Mortgage rates will rise during 2014, so don't gamble with your rate lock," McBride says.

Check mortgage interest rates available in your area.

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