One thing that consumers are very keen on paying attention to is mortgage rates. Recent research has indicated that a consumer will begin researching rates months before they finally pull the trigger and decide on a loan. If you are looking at buying a home in the near future, or you are just someone who likes to stay on top of the trends, you should pay close attention. Below, we will go over some predictions and projections from a few expert sources.
Freddie Mac is, in short, a federally backed company that deals in the purchases and sales of mortgage securities. Since 1971, Freddie Mac has released a weekly report of lending trends. Recently, the interest rates on 30-year loans were at 4.53 percent according to this publication. This figure continued to drop significantly to an impressive 4.1 percent interest. While the current numbers look good for potential homebuyers, Freddie Mac is projecting these figures to climb back up to 5 percent as time continues to pass. It is important to note that the increase in rates is just a projection based on observable market trends. Also important to keep in mind is that the increase in mortgage rates will occur over time and not all at once.
Unrelated to Freddie Mac is the Mortgage Bankers Association, which has also made projections for the coming future similar to those made by Freddie Mac. They also predict interest rates gradually rising to a 5 percent plateau.
An esteemed economist, Dr. Bill Conerly, projects an even sharper increase in rates for the foreseeable future. His forecast has this figure topping out around the 6 percent range. But, Dr. Conerly is not overly concerned about this rise, and he doesn’t believe the public should be either.
The Home Buying Institute, however, does not see these figures getting much higher than they already are. They claim that some of the more dire predictions are focused on the state of the Federal Reserve. As you should know, the Federal Reserve is winding down and eventually completely stopping their economic stimulus incentives. These stimulus incentives were put in place amidst a severe economic crisis in 2008, and the fact that the Reserve is finally comfortable easing out of the programs speaks volumes to Dr. Conerly’s assertion that the economy is getting stronger.