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
Getting Ready to Plunge into Investments? Have a look at These Tips for some Cool Ideas
Investing in stocks isn’t easy; one needs to develop their knowledge and convert it into a realistic plan. It’s not about...July 29, 2020
Learn How to Secure Your Child’s Future With These Invaluable Insights
Becoming a parent is the most joyous experience of one’s life; however, with the arrival of a new family member, expenses...July 26, 2020
Are you familiar with these Loan Forgiveness Programs for Students?
Student loans make for a viable option to pay for your education, but often, repaying them can be a bit of...July 25, 2020
Lufthansa Airlines is Launching a New Leisure Unit under the name ‘Ocean’ – Here’s Everything You Need to Know
The airline industry is facing a major challenge during the past few months owing to the complete paralysis of movement, thanks...July 23, 2020
Cool Tips to avoid Letting your Income Subside During Coronavirus
There’s an astonishing number of people adversely impacted by Coronavirus all around the world. This stark reality is evident from the...July 22, 2020
The Most Favorable Things in Which You Can Invest In 2020
While the world was anticipating a financial and economic crisis similar to the one in 2008, it instead found itself facing...July 21, 2020
Looking to Secure Your Wealth During These Uncertain Times? These Low-Risk Investment Ideas Might Be Just What You Need
The year 2020 has presented the world economy with unprecedented challenges. Due to the coronavirus emergency and the worldwide reactions to...July 15, 2020
Learn How to Ace Your Next Video Interview With These Expert Tips
Due to the limitations of the Covid-19 pandemic, many people have been met with new issues that need immediate resolution. One of...July 14, 2020
Finances Got You By The Throat? Here’s How You Can Reduce Your Tax Payments This Year
Tax day is due July 15th and not everyone is looking forward to it. In 2019, approximately 8 million people did...July 13, 2020