Mortgage Rate Predicitons

Mortgage Rate Predicitons

30-year rate projection

Freddie Mac forecast for 30-year mortgage rates, through Dec. 2015

It’s easy to say that within the past 6 month, mortgage rates have been at an incredibly low level. Predictions are rapidly coming in for next years forecast and they look somewhat different than what we’ve been experiencing this year.

The 30 year fixed mortgage rates started out this year at around 4.53% and at the beginning of September were about 4.10%. According to Freddie Mac, these rates should do a steady increase throughout the next year and should reach around 5% at the end of 2015.  Lawrence Yun expected rates to climb to 5.5%, which is a dramatic increase from what we are experiencing now. Fortunately for you, this is a sign of significant growth within the economy.The Federal Reserve’s Chairwoman, Janet Yellen, points out a few different reasons as to why this growth is happening. She states that, “the Fed’s easy credit policies, reduced household debt, rising stock and home prices and less-restrictive government tax and spending policies” are causing the increasing growth. These low mortgage rates are driving up the market, causing people to scramble to find a home. This causes there to be a lack of homes available on the market and allows some potential home buyers to miss out on the low rates being offered.

In addition to these higher rates, there is higher payments to be made and more expensive home prices. With this being said, now would be the best time to buy if you are looking into purchasing a home this year. Like anything else in the economy, the predictions for these rates are merely predictions. They could change at any minute and cause an uproar, so be ready if this does happen.