Market projections point to rising interest rates. According to recent data and expert predictions, it could reach the 5 percent tier by the end of next year. Housing inventory is also expected to ease up by 2018. So should you lock now or wait for home prices to relax?
Just this week, mortgage interest rates inched forward as the senate passed its version of the tax bill. Per the recent Primary Mortgage Market Survey® data released by mortgage giant Freddie Mac, the 30-year fixed-rate increased by an average of 0.5 basis point to 3.94 percent. A week ago, 30-year fixed-rate was at 3.90 percent, still lower from 4.13 percent during the same time in 2016.
Meanwhile, the 15-year fixed-rate median percentage rose from 3.30 percent a week prior to 3.36 percent. An increase of 0.5 basis point. This is the same average a year ago.
The five-year adjustable rate also increased by 0.3 basis point from 3.32 percent last week to 3.35 percent – slightly higher compared to 3.17 percent last year.Get today’s mortgage rates.
Period of volatility
The possibility of an increasing federal borrowing trend was spurred by the Senate’s vote on tax legislation. This in turn is predicted to take mortgage benchmark rates higher.
Possible impediments to this potential increase are global market factors that have significant influence on Fed rates.
“It seemed at the time that mortgage rates were poised to continue rising,” says Sierra Pacific Mortgage branch manager Michael Becher.
“But this week markets have turned their attention elsewhere. Concern about China’s economy, continuing tensions with North Korea, turmoil in the Middle East as a result of Trump declaring Jerusalem the capital of Israel, and a possible U.S. government shutdown have all contributed to a flight to safety trade that has seen Treasury yields and mortgage rates drop,” he adds.
The possibility of the government shutting down and the tax reform bill legislation are elements in the game that will determine how rates will behave in the near future.
Any positive aftermath from these events will most likely cause rates to increase. When the Fed shifts gear next week, mortgage rates could very well enter a period of volatility.Find a lender today!
What does this mean for the home buyer?
There’s a rising trend in interest rates. If you want to play it safe and there are no other reasons holding you back, it might be wise to lock now. However, if your need to move is not urgent and you want to see how the events play out – with the above data projections on inventory in mind, then you could wait a bit more to find properties that will potentially be more affordable in the future. Or, you can choose to get an adjustable-rate mortgage with low initial interest rate and refinance to a fixed-rate later.
The Primary Mortgage Market Survey® was established in April 1971 as the foremost source of mortgage trends in the regional and national level. Its data is utilized by both the public and the mortgage industry at large to gauge market conditions and evaluate mortgage loan options.Click to See the Latest Mortgage Rates»