By Kathleen M. Howley | Bloomberg
More jobs and easier loan terms will boost demand for new mortgages in the second half of this year as homebuyers shrug off higher interest rates, according to a Fannie Mae forecast due later today.
Lending for mortgages to purchase homes will increase 21 percent for the final six months of 2013 to $341 billion from $282 billion in the first half, according to a copy of the forecast obtained by Bloomberg News.
Total U.S. residential mortgage debt probably will increase 1.1 percent in 2013 to $10 trillion, followed by another increase to $10.2 trillion in 2014, Fannie Mae estimated.
A 1 percentage-point jump in average mortgage rates since May hasn’t curbed enthusiasm for home buying, even as declining demand for refinancing saps profit at the biggest banks. Almost 4 percent of Americans in July said they plan to purchase a home in the next six months, the highest in at least four years, according to the Conference Board, a New York research firm.
