Mortgage Forecast: Here’s What Interest Rates Borrowers Can Expect to Get On Their Mortgage In 2020
The future is unpredictable, financial markets much more so. The same also applies to mortgage interest rates. But while making exact predictions is certainly not easy, experts can still make educated guesses based on their observations of a variety of telling factors.
These can then be used as a guideline by both house hunters and homeowners who may be looking to apply for or refinance their mortgage. Here’s what financial experts have to say about the state of mortgage interest rates for the coming year.
The good news is that numerous real estate professionals, as well as housing organizations, agree that 30-year fixed-rate mortgage rates would continue to remain in the low levels until 2020 with a few only predicting a slight increase.
According to the Mortgage Bankers Association‘s mortgage forecast, the average rate for next year is 3.9%. For comparison, 2019 rates began at 4.51%. Meanwhile, Fannie Mae and Freddie Mac, state-sponsored loan companies, expect rates to stay between 3.6% to 3.7% for the entirety of the coming year. These figures aren’t too far off from the rates people can get at the moment.
Further supporting this are the similar forecasts of the National Association of Realtors and Redfin chief economist Daryl Fairweather at 3.6%. Fairweather says though that this could be only assumed given that the economy continues to grow.
Still, it’s still important to remember how 30-year fixed-rate mortgage rates can change is as fast as a week considering factors like the current forces of supply and demand. For example, interest rates are likely to fall when mortgage providers find it easier to sell off their mortgages and mortgage-backed securities. Other factors that might affect rates are the strength of the housing market, the state of the stock market, and the risk of recession.
Meanwhile, capital markets trader Preetam Purohit has a slightly less optimistic prediction than his peers. He expects mortgage rates to hover between 3.75% to as high as 4.5% for 2020. Purohit also emphasized the potential impact of the current state of the relations between the economic giants China and the United States.
He says that the Federal Reserve is likely to make interest rate cuts at the event of a mild recession due to the potential worsening of the trade conflict between the two countries.
Best Course of Action
At the moment though, True Contrarian CEO Steven Jon Kaplan advises people to take advantage of the current low rates and refinance their home. According to him, rates won’t go significantly lower than they are now in the near future unless the country goes into a recession. The same advice can apply to those who are currently shopping for a home.
More in Investments
Prince Harry and Meghan Markle to Set Up New Foundation After Their Split from Kate and William
The world can never get enough of these royals. The two couples amaze people and leave them wanting more. We want...March 17, 2020
Snapchat Stock in Trouble as More Executives Leave the Company
Snapchat’s stock has been a trainwreck this year and investors are losing patience with CEO Even Spiegel and his “dictatorial management...March 17, 2020
A College Education is an Investment, But College Graduates Say They Regretted Taking These Majors
Getting a college education is often seen as a sort of investment in oneself. It opens doors to many opportunities as...March 17, 2020
Here’s How You Can Stay On Top Of Your Personal Finances While Also Running Your Own Business
Everyone will benefit from managing their personal finances more closely. However, it’s still worth acknowledging that business owners tend to have...March 7, 2020
BEST Investment Tips to Help You Achieve Your Retirement Goal
Investment has a top spot on the list of expert-suggested ways of increasing wealth, establishing solid future fallback plans and saving...March 7, 2020
Target and Disney Forge an Exciting Partnership and We Didn’t See This Coming!
For decades now, the world has enjoyed the magic that is Walt Disney. Who can say that they haven’t interacted with...March 6, 2020
Already Planning Your Retirement? These States Are The Best Bets If You Want to Save Money
Similar to real estate, retirement, in a way, is all about location, location, location. People spend decades planning for retirement and...March 6, 2020
Rapper Kanye West Is Expanding His Real Estate Holdings In The Unlikeliest Of Places–Check Out His New Purchase Here
Kanye West is best known for his music and clothing business ventures. But it looks like the 42-year-old rapper is really...March 5, 2020
These Common Mistakes Are Ruining Your Chances of a Comfortable Retirement
After being committed to your workplace for a number of years, you unconsciously begin to look forward to retiring. You must...March 5, 2020