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Will Mortgage Rates Remain Low Next Year?

Thursday, November 19, 2020   /   by Teresa Ryan

Will Mortgage Rates Remain Low Next Year?

In 2020, buyers got a big boost in the housing market as mortgage rates dropped throughout the year. According to Freddie Mac, rates hit all-time lows 12 times this year, dipping below 3% for the first time ever while making buying a home more and more attractive as the year progressed (See graph below):
kcm-infographic-1605804735.jpg

When you continually hear how rates are hitting record lows, you may be wondering: Are they going to keep falling? Should I wait until they get even lower?


The Challenge with Waiting

The challenge with waiting is that you can easily miss this optimal window of time and then end up paying more in the long run. Last week, mortgage rates ticked up slightly. Sam Khater, Chief Economist at Freddie Mac, explains:

Mortgage rates jumped this week as a result of positive news about a COVID-19 vaccine. Despite this rise, mortgage rates remain about a percentage point below a year ago.”


While rates are still lower today than they were one year ago, as the economy continues to get stronger and the pandemic is resolved, there’s a very good chance interest rates will rise again. Several top institutions in the real estate industry are projecting an increase in mortgage rates over the next four quarters (See chart below):
kcm-infographic-1605804741.jpg


If you’re planning to wait until next year or later, Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), forecasts mortgage rates will begin to steadily rise:
kcm-infographic-1605804745.jpg

As a buyer, you need to decide if waiting makes financial sense for you.


Bottom Line

If you’re planning to buy a home and want to take advantage of today’s low rates, now is the time to do so. Don’t assume they’re going to stay this low forever.


Call Teresa Ryan at 630-718-0424 today, for your home buying and selling needs in Naperville and the Western Suburbs of Chicago. For inquiries, please call 630-276-7575.

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Ryan Hill Group - Century 21 Affiliated
Teresa Ryan
1288 Rickert Dr, Ste 300
Naperville, IL 60540
630-276-7575
630-718-0424

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