1) Rates will continue to remain low. Rates should stay below 5% forthe year, and will probably continue to be below 4% for most consumers for most of the year. However, consumers have seen the rate floor continue to drop, so will these rates be looked on as low enough?

2) Demand for housing will continue to surge. 2012 showed that a lack of inventory may be more of a challenge in some areas than a lack of demand. Many other areas that were most devastated by the real estate meltdown have begun to show signs of improvement.

3) Prices will continue to increase. Pricing is simply a mechanic of supply and demand, and demand for housing will remain strong in 2013. Supply of homes in many areas has started to normalize with only a few areas (NY, NJ, CT, IL for example) still fighting large inventories of distressed properties. Expect appraisals to be an issue though as HVCC and the real estate meltdown have made appraisers and lenders wary of any price inflation, even ones natural for the market.

4) Move-up sellers will return. With housing prices recovering and rates remaining low, many homeowners will realize that now may be their greatest opportunity to make the move to a lifestyle they always wanted.

5) The consumer will continue to demand more from their Realtor and Mortgage Loan Officer. Consumers will continue to expect both the improbable and the impossible. Shorter escrow and closing cycles, low rates, and a problem free process just to name a few. More than ever fates of MLOs and Realtors are entwined.

Last Week's Mortgage Rates Recap
After a quiet holiday time period of steady mortgage rate improvements, last week proved our forecasts correct with a very quick spike in rates caused by the "solution" of the Fiscal Cliff dilemma and the stock market rally because of it. Thursday was the worst day, with many lenders repricing mortgage rates multiple times through the day. Many consumers saw not only rebate credit disappear, but actual rate increases of .125%-.250%.