What should we expect in the mortgage rate industry for 2020?
Well, here we are, a new decade and a new year but what should we expect from the mortgage industry, interest rates, and how the housing market will go this year? Experts have rounded up their predictions so let’s see what they’ll say.
One of the best news that buyers can hear is that most experts predict that the mortgage rates will remain near record lows throughout the year. If you’re still considering purchasing a home you may not want to wait for them to drop any lower. They’re about as low as they’re going to get so I wouldn’t wait too much longer. A recent study said that most homebuyers are getting a jump on the competition by searching for homes in January rather than waiting until spring. This is definitely something to consider. You might want to lock in your rate now so that when the time comes to buy and you find a home you love, you’re all ready to go.
As far as mortgage interest goes, top housing authorities have given their two cents on what the 30 year fixed mortgage interest rates could be in 2020 and here’s what they said: [According to MSN.Money]
- CoreLogic: <4%
- Fannie Mae: 3.6%
- Freddie Mac: 3.8%
- Kiplinger: 3.7%
- Mortgage Bankers Association: 3.7%
- National Association of Home Builders: 3.9%
- National Association of Realtors: 3.8%
- Realtor.com: 3.85%
- Wells Fargo: 3.6%
- Average rate for all of the above: 3.74%
Many real estate agents also fill these are predictions are pretty spot on and most rate forecasts fall within 0.35% of each other so either everybody will be right, or everybody will be wrong. Most projectionists are seeing rates from 3.6% to 3.7% and 30 year fixed rate loans have been holding pretty steady over the last couple of months between those numbers.
Sure, it can be easy to predict that nothing will change if we say that all of the interest rates will stay approximately the same. However, there are a few economists and real estate attorneys assuming that will be on the higher end of the 3% mark and some think will be on the lower end. So what really can we expect as a buyer for someone is considering a refinance and 2020?
We have to consider economic, global, and political factors, which could impact mortgage rates over the next year. Upset in foreign markets can drive investments to safe places like the US treasury, which drive down yields on treasury bonds. This can impact long-term interest rates and some economic uncertainty across the globe can interfere with interest rates, however, most don’t assume that these will dramatically change enough to increase mortgage rates in 2020 by much. The presidential election in 2020 alone could keep rates lower than many expect, creating good news for those considering a refinance or buying. Overall, it’s typically a good idea to seek financing during an election year because the party in power wants to create the best economic environment possible prior to the election.
Read More: Can I refinance to buy a second home?
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So, should buyers wait it out?
Here’s my take on it, if you’re financially ready to purchase a home or you’re considering a refinance act now while current rates are low. This means that money is cheap to borrow and when interest rates get better it’s usually only by small fractions. If you can get a better interest rate of at least one full percent, it will dramatically change what you’re paying out monthly. Waiting for a slight advantage doesn’t make a lot of sense. The trade-off for a minimally lower interest rate might be that you pay a higher home price as housing prices are continuing to go out. However, for refinance applicants, it’s a great time as their home values increase and interest rates go down.