“Rates are not going to soar because we’re still in a pretty weak economic recovery,” Denk said. “When the dust settles, (rates) are still a bargain.”
Credit may get easier
After years of tight lending standards, homeowners definitely will have an easier time getting mortgages, said Svenja Gudell, director of economic research for housing website Zillow.
After last summer’s 1-percentage-point increase in mortgage rates, the refinancing business dried up for lenders.
“They want to fill that void with purchase money loans,” Gudell said. That may mean lenders may approve loans to borrowers with lower credit scores or higher debt.
“So we’ll see a lot of people who couldn’t get a mortgage in 2013 able to get a mortgage in 2014,” she said.
Others, however, aren’t so sure.
For one thing, new federal lending standards take effect on Jan. 10, meaning that some borrowers will get more scrutiny and less money. The new rules will have little effect in most cases, Gudell said, since most loans already meet the new standards.
But Chapman University economist Esmael Adibi said lenders will have more leeway with the loans they plan to hold in their portfolios. Tougher standards still will apply for loans that financial institutions plan to sell to mortgage giants Fannie Mae and Freddie Mac or elsewhere on the “secondary” mortgage market.
“Banks are eager to boost their lending,” Adibi said. “However, rates and requirements depend on the type of financial institution (offering the mortgage).”
Commercial recovery remains slow
Forecasters say vacancies will drop and rents will rise this year in office buildings, shopping centers, factories and warehouses. More deals will get done and sale prices for buildings likely will go up.
Nonetheless, the rate of recovery is expected to remain at moderate levels for commercial real estate.
Commercial real estate recovery “tends to lag broader economic growth,” said Deloitte & Touche’s 2014 outlook.
Nationally, commercial rent increases are projected in the 2.2 percent to 2.5 percent range this year, according to the National Association of Realtors.
©2014 The Orange County Register (Santa Ana, Calif.)
Visit The Orange County Register (Santa Ana, Calif.) at www.ocregister.com
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