The Federal Reserve has made the official announcement that they will begin to taper their current bond buying program of $85 billion per month. This program has been primarily responsible for keeping mortgage interest rates at near all-time lows for more than a year. When the Fed begins to taper their bond buying program, mortgage rates will begin to increase.

What does the tapering mean for home buyers in the future? It means rising interest rates not only for home purchase loans, but also for other large loans such as car loans or student loans. Over the last year, homes have quickly sold due to the low interest rates and low inventory. However, in the next year it will become more difficult for sellers to sell due to higher interest rates.

Some industry analysts predict that interest rates may climb as high as 5 to 5 1/2 percent in during 2014. With the fear that interest rates are going to rise, many consumers are rushing to make a purchase before rates begin to climb any higher.

If you are in the market to purchase a home in California, Prospect Financial Group, Inc. can help you secure a low interest rate on your home purchase loan. Give us a call today at 858-605-0952.