Freddie Mac predicts low rates
You’ve probably heard that mortgage rates are close to historic lows. And according to industry experts, there’s a good chance they will stay low. Freddie Mac, a government sponsored agency that backs consumer mortgages, anticipates that rates will hold around 3.7% all the way through 2020.
Recently, Freddie Mac published a housing market forecast, which explained the downward pressure on interest rates caused by global uncertainty. Some factors include trade wars, pending recession, and the 2020 election. Economists predict that people will want to move money out of the stock market and into what they perceive as safer investments, like Treasury bonds and mortgage-backed securities. Plus, The Fed is unlikely to raise interest rates during an election year. Some mortgage-backed security experts believe the 10-year Treasury note will hit all-time lows, meaning mortgage rates would also hit all-time lows.
Rates aren’t guaranteed to drop in 2020
Of course, there is no guarantee that Freddie Mac’s predictions are correct. Mortgage rates in 2019 and 2020 could increase rather than drop. One reasons rates could rise is that the economy may be much better than anticipated. Additionally, consumer price inflation could unexpectedly move higher, forcing the Fed to slow the economy. Third, if government borrowing increased, it would provoke bond investors to demand higher interest rates. At this point, given how low rates are, the opportunity for rates to decline further is much lower than the chance they might rise.
When to lock
All this means buyers and homeowners looking to refinance will be able to take advantage of low rates for the foreseeable future. But if you’re liking today’s affordable rate quotes today, don’t wait to lock. Consider that mortgage rates are already near 40-year lows. If you can afford to buy a home today, don’t wait to take advantage of low rates now. Most experts agree that you shouldn’t pass on this opportunity in hopes of lower rates in the near future; waiting could result in a lost opportunity.
If you want to take advantage of today’s favorable rates, fill out the form below for a no cost, no obligation quote.