Mortgage Rate Projections

Dated: November 19 2020

Views: 25

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.

Blog author image

Arna Freedman

Looking for a Pro? Someone who will listen, negotiate and get the home you are looking for with the least amount of stress? I have been successfully working for buyers and sellers in Orange County fo....

Latest Blog Posts

SELLING YOUR HOME NOW PROVIDES A BIG BONUS

Why Right Now May Be the Time to Sell Your HouseThe housing market made an incredible recovery in 2020 and is now positioned for an even stronger year in 2021. Record-low mortgage interest&

Read More

Will Mortgage Forbearance Lead to Tsunami of Foreclosures?

Will Forbearance Plans Lead to a Tsunami of Foreclosures?At the onset of the economic disruptions caused by the COVID pandemic, the government quickly put into place forbearance plans to allow

Read More

2021 Home Pricing Appreciation Forcasts

What Does 2021 Have in Store for Home Values?According to the latest CoreLogic Home Price Insights Report, nationwide home values increased by 8.2% over the last twelve months.

Read More

Must Know When Selling Your House

3 Must-Do’s When Selling Your House This YearIt’s exciting to put a house on the market and to think about making new memories in new spaces. However, despite the anticipation of what

Read More