Big Question: Will Mortgage Rates Remain Low Next Year?

Dated: November 23 2020

Views: 3655

Will Mortgage Rates Remain Low Next Year?

Will Mortgage Rates Remain Low Next Year? | MyKCM

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):Will Mortgage Rates Remain Low Next Year? | MyKCMWhen 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):Will Mortgage Rates Remain Low Next Year? | MyKCMIf 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:Will Mortgage Rates Remain Low Next Year? | MyKCMAs 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.

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Derek Brandenburg

The founder of the Brandenburg Crew Inc., Derek, was raised with the notion that hard work was a way of life. Growing up on a farm, most days started at 6am, and ended at 11pm. This work ethic followe....

1 comments in this topic

  • Posted by Elroy Harold Podratz
    11/04/2021
    I need to but the property at a reduced priec.

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