With unemployment figures improving and the economy showing more signs of life, home buyers are taking another look at the mortgage market for both variable and fixed rate mortgage rates. Whether a first-time buyer, or a homeowner looking to refinance or just relocate, people are paying close attention to what interest rates on home loans are, and what might happen to them during 2012.

Is 2012 a Good Time to Buy or Refinance?

Currently, it’s still a buyer’s market with a lot of houses for sale. This is a good thing for keeping housing prices low, while monitoring the volume of home loans as well. The current market trends are also impacting monthly payments for the better. This helps brings more buyers into the market and more competition for homes. Generally, experts think housing prices have stabilized and won’t go much lower. With stable housing prices, the decision of whether or not to buy is highly dependent on variable or fixed rate mortgage rates in the coming year.

Right now, mortgage interest rates remain at historic lows. Economists are predicting that they will remain low throughout the first part of 2012. Their predictions are based, in large part, on the Federal Reserve’s stated commitment to keeping mortgage rates low and steady. Even as the economy improves and starts to pull mortgage rates up, the Federal Reserve intends to act through its monetary policies to exert force and pull them down. In short, 2012 will be something of a tug of war, however, should result in fairly stable mortgage rates. Banks are also expected to loosen their purse strings and begin to lend more for people wanting home loans. This should lead to many have an easier time, while being approved in 2012.

This is all good news for potential home buyers. However, mortgage experts point out that certain fees associated with conventional mortgages are going to go up in 2012. People applying for Fannie Mae, Freddie Mac, and FHA loans, will see some fee increases on mortgages in 2012. These also equate to slightly higher interest rates or higher points. However, with overall mortgage rates low and expected to remain stable in 2012, mortgages from these lenders should still be very attractive to borrowers.

What Does This Mean to Home Buyers?

Steady home prices and expected low stable mortgage rates mean it’s a good time to be in the housing market. Ultimately, though, both home prices and interest rates are affected by local conditions. Potential home buyers should do research, including comparison sites on the Internet, which are great resource. This will allow them to make a worthwhile and profitable choice.