Mortgage interest rates dropped lower in 2019 than many experts predicted a year ago. That was welcome news for many borrowers who ended up buying a home and homeowners who decided to refinance. Now that a new year is nearly upon us, it’s natural to be curious about 2020 mortgage rate predictions.
2020 mortgage rate predictions
Where will mortgage rates in 2020 be? For a forecast, we looked to leading housing organizations and industry authorities. The good news is that all of the groups we researched expect 2020 mortgage rates to remain near record lows.
If you are in the market to purchase a home, you may not want to wait for rates to drop any lower. Still, it may be helpful to know where the pros think rates will land next year. Read on for guidance.
When it comes to mortgage projections, it’s important to know who to trust. While anyone working in real estate can prognosticate on rates, it’s best to refer to top housing authorities. Here’s what they’ve recently predicted regarding 30-year mortgage fixed interest rates in 2020:
- 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%
Evaluating the predictions
Rick Shargo, president/CEO of CJ Patrick Company, believes these 2020 mortgage rate predictions are spot on.
“All these rate forecasts fall within about 0.35%. So it’s likely that either everyone will be right or everyone will be wrong,” he says. “Most of the economists I follow are predicting rates in the 3.6% to 3.7% range. That lines up with all the forecasts from the top authorities.”
Sharga adds that “rates for 30-year fixed-rate loans have been holding pretty study between 3.5% and 3.7% for quite some time now. And it seems likely they’ll remain in that range for the foreseeable future.”
James McGrath, co-founder of Yoreevo, says he agrees most with the NAHB and MBA rate forecasts.
“That’s because they are the closest to current market rates. To differ materially from current market rates, you are saying you think you know how to forecast interest rates better than the market,” says McGrath.R
Ralph DiBugara, founder of Home Qualified, concurs with groups forecasting rates trending closer to 4% next year.
“I don’t believe the interest rate predictions in the mid-3% range are accurate,” explains DiBugnara. “It seems we’ve found a comfortable healthy range in the high 3% area. I see consistency here over the next 12 months.”
Bruce Ailion, Realtor and attorney, expects rates to be around 3.55% a year from now.
“I don’t believe the interest rate predictions in the mid-3% range are accurate,” explains DiBugnara. “It seems we’ve found a comfortable healthy range in the high 3% area. I see consistency here over the next 12 months.”Bruce Ailion, Realtor and attorney, expects rates to be around 3.55% a year from now.
“But predicting rates isn’t as easy as predicting the weather. I think about this like predicting a hurricane 10 days before landfall. All the best estimates and models are merely guesses this far out,” adds Ailion. “Each of these great sources offering forecasts has the best information available. Yet it turns out our predictions offered a year ago were all wrong.”
Source: MSN – Real Estate | Erik Martin | Read the Full Article Here
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