Mortgage Rates Drop this Week – 30 Year Mortgage Rates Back Under 4.00%
Mortgage rates moved lower aging this week, following bond yields lower. This is the third consecutive week that mortgage rates have declined. Average 30 year mortgage rates fell back below 4.00 percent for the first time in the past three weeks.
Average 30 year mortgage rates fell to 3.95 percent this week, down from the prior week’s average 30 year rate of 4.01 percent. Since mid-March, average 30 year mortgage rates have fallen 35 basis points, down from 4.30 percent on March 15th.
This current downtrend for mortgage rates won’t last long because interest rates are forecast to move higher in 2017. The Federal Reserve is expected to increase their benchmark interest rate, the fed funds rate, at least twice in 2017.
The increases have put upward pressure on bond yields and in turn, mortgage rates will also move higher. If you’re thinking about buying a home or refinancing a mortgage, now is a good time. Current 30 year mortgage rates are still low, historically speaking, and not much higher from the all-time lows of around 3.25 percent set back in 2012.
If forecasts are correct and interest rates are moving higher we expect average 30 year mortgage rates to hit 4.50 percent by the end of 2017. Longer term, the trend for higher rates is expected to continue into 2018 and 2019.
The Mortgage Bankers Association’s Mortgage Finance Forecast puts average 30 year mortgage rate at 4.70 percent at the end of 2017. The current MBA’s forecast for 30 year rates at the end of 2018 is at 5.20 percent.
Even if 30 year rates do head towards 5.00 percent, rates are still low historically speaking. For most of the 2000s, before the financial crisis, 30 year rates were in the 6.00 percent to 7.00 percent range. Going back to the early 1980’s 30 year rates were in the double-digits and as high at 18 percent.
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