In 2016 we heard for much of the year, expert after expert predicting the rise in interest rates. They were wrong. For most of the year, mortgage interest rates were at or near historic lows.
Now that we are into 2017 the experts predict mortgage rates will rise. However, from experience, no one knows for sure whether rates will rise a lot or a little, or even if they will fall.
In the 2017 wheel of fortune game, we have many contestants, and their forecasts look like this:
Fannie Mae says, “Mortage rates are predicted to rise gradually in the coming year, ultimately reaching a fourth quarter average of 4.3 percent.”
Lawrence Yun, the chief economist with the National Association of Realtors says, “By the end of next year (2017), mortgage rates are expected to reach around 4.6 percent, and the Federal Reserve is expected to raise the Fed Funds rate a few more times to 1.25 percent.”
Just last month the Mortgage Bankers Association predicted that mortgage rates would reach 4.7 percent by December 2017. Note, they predicted a year ago at this time that rates would be at 5.2 percent by the end of 2017.
So while these same experts predicted rising mortgage rates instead, we got near or at all-time lows for much of the year.
The consensus above does suggest that we will continue to see mortgage rates somewhere in the four percent range and likely higher in 2018.
This is excellent news when you take things into perspective. In 1981 the average mortgage rate was 16.63 percent!
The record annual low for mortgage rates was 3.65 percent just last year which was just below the previous record set in 2012. That’s right! Last year was the best time to get a mortgage in almost 70 years.
The average in mortgage rates in 2016 could have been much lower had it not been for the sudden up-tick we experienced the last 60 days of the year. Mortgage rates averaged just 3.58 percent during the first 10 months versus 3.99 percent during November and December.
As low as mortgage interest rates were in 2016, they could have been lower — and therefore it’s my humble “opinion” where things are now economically that there is less pressure to push up rates in 2017. So we shall see.
Are you ready to capture a mortgage rate near all-time lows?