Mortgage Rates in 2014: Where Are They Heading

Mortgage Rates in 2014: Where Are They Heading

The Mortgage Bankers Association (MBA) is forecasting that mortgage rates will likely rise above 5% next year and average 5.3% by the end of 2015. That would mark a significant increase... some 50-75 basis points higher than where they are as of this writing depending on the type of loan product and borrower qualifications. How might this affect Charlotte real estate transactions? Read on.

The MBA expects that the Federal Reserve will decide to taper its $85-billion per month bond-purchasing program in early 2014 and end it altogether in September 2014. The Fed’s bond buying program has been keeping mortgage rates low. The Fed has hinted in recent months that it will soon be winding down the program and the latest October Fed minutes have put this prospect again squarely in focus.

As a result, refinancings will continue to drop, and borrowers seeking to tap the equity in their homes will be more likely to rely on home equity seconds rather than cash-out refinances. The MBA expects home purchase applications for mortgages to rise 9% next year, following expected continued home sales and price increases.

However, the MBA projects that overall mortgage originations will drop 32% in 2014, as the number of refinancing applications post a large drop in the new year due to expected rising interest rates. While refinancings make up the bulk of home applications today, that trend is expected to reverse next year. Purchase loans are expected to make up 60% of originations next year compared to about 38% this year.

Home purchase originations are expected to increase in 2014 due largely to gains in home sales and home prices. Also projected is a decline in the share of sales paid for with cash, and higher average loan-to-values on purchase mortgages, due to the rise in home prices.


5 Bed

2.5 Bath


1313 Mallory Lane,
Waxhaw, NC 28173


Listed ByAllen Tate Ballantyne

MLS® #3255180 MLS® # 3255180 (Active)

6 Bed

4.0 Bath


2003 Ridley Park Court,
Indian Trail, NC 28079


Listed ByWilkinson ERA Real Estate

MLS® #3257402 MLS® # 3257402 (Active)

5 Bed

3.0 Bath


3409 Bidwell Avenue,
Waxhaw, NC 28173


Listed ByKeller Williams Ballantyne Area

MLS® #3263429 MLS® # 3263429 (Active)

3 Bed

3.0 Bath


10351 Threatt Woods Drive,
Charlotte, NC 28277


Listed ByRE/MAX Platinum

MLS® #3263804 MLS® # 3263804 (Active)

3 Bed

2.0 Bath


5924 Mcwhorter Road,
Waxhaw, NC 28173


Listed ByAllen Tate Indian Land

MLS® #3267082 MLS® # 3267082 (Active)

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The data relating to real estate on this Web site derive in part from the Carolina Multiple Listing Services, Inc. IDX program. Brokers make an effort to deliver accurate information, but buyers should independently verify any information on which they will rely in a transaction. All properties are subject to prior sale, change or withdrawal. Neither John Walker nor any listing broker shall be responsible for any typographical errors, misinformation, or misprints, and they shall be held totally harmless from any damages arising from reliance upon this data. This data is provided exclusively for consumers personal, non-commercial use and may not be used for any purpose other than to identify prospective properties they may be interested in purchasing. © 2017 Carolina Multiple Listing Services, Inc.

Last updated on Apr 30, 2017.