In Raleigh, North Carolina homeowners have been able to refinance below 4 percent for the entire year of 2012. Heading into 2013 it does not look as if much is going to chance. In fact, if the Christmas holiday shopping numbers continue to underperform the Federal Reserve Bank has no option but to keep interest rates near historic lows for the early part of 2013. On the final day of 2012 the average 30 year fixed mortgage rate is trending around 3.35 percent.
Raleigh, North Carolina mortgage data
When looking at the chart for average 15 and 30 year fixed mortgage rates for the year 2012 it is quite obvious there were no significant moves higher. The 10 year treasury rate yield remained below 2.25% for almost the entire year which helped to keep 30 year fixed rates at or below 3.5%. There was a brief period in March when the 10 year yield was above its 200 day moving average but this did not last very long.
As most in the financial industry know, the 10 year treasury rate yield greatly determines the overall direction of the 30 year fixed mortgage. In Raleigh, North Carolina and throughout the United States that direction has been down for several years. If the local and regional economy gets back on its feet and consumer spending increases in the next several months the end of 2013 could see higher overall mortgage interest rates.
Predicting interest rates based on retail stocks
Unfortunately, it is nearly impossible to predict what consumers are going to do in the near future. The Christmas holiday shopping season was subpar and this has caused many financial analysts to downgrade some big name stocks. Names like Apple and Amazon could see their stock prices fall in the near term just because consumers are not spending as much.
Although people may not realize it, the drop in major retail stocks could influence the direction of interest rates as a whole. If retail companies are not make a significant amount of money it stands to reason that the common American is also struggling. When the common American citizen does not have discretionary spending cash they are not going to invest in real estate or even consider buying a new home.
The objective of the Federal Reserve Bank is to help banks lend money at proper interest rates. When little money is flowing through the economy interest rates are going to be very low. This will encourage potential borrowers to use banks to gain access to cash through personal loans, home loans or credit cards. Although some people do not want to borrow money it does help the overall economy.
Looking ahead to early 2013
With average 30 year fixed mortgage rates under 3.5 percent it is very hard to predict lower interest rates. That said, if consumer spending and consumer sentiment does not improve in the first three months of 2013 it is hard to come up with an equation for interest rates to move higher. Consumer data will be released each month and it may never be as important as the months of January, February and March of the upcoming year.
An improved economy will mean higher interest rates. For those that honestly feel as if the economy will drastically improve in 2013 it might be worth it to take advantage of very low fixed refinance rates. If there is any concern about the overall United States economy it never hurts to remain patient and wait for the next move by Ben Bernanke and the Federal Reserve Bank.
Homeowners throughout the southeast will look to banks like Wells Fargo, Bank of America, First Citizens Bank and BB&T for refinance options. It is important for all potential borrowers to remember that only those with the best credit scores and largest down payments are going to get interest rates close to three percent on a 30 year fixed mortgage. With a solid credit score above 750 and a down payment that is above 20% of the loan value it should not be difficult to take advantage of great interest rate offers from any local, regional or national bank.