Average Mortgage Rates Still Historically Low
U.S. Treasury Yields higher. Average 30 year mortgage rates today increased to 4.34 percent, up from last week's average 30 year rate of 4.29 percent. The six basis point increase continues the uptrend for mortgage rates this past month.
Although mortgage rates are moving higher, the increases in rates hasn't warranted all the hubbub about rates increasing. In fact, mortgage rates are not much higher than they were a year ago.
On March 6th, 2017, the average 30 year mortgage rate was 4.21 percent, only 13 basis points below the current level. Going back to August 2016, average 30 year rates were at 3.44 percent, only 90 basis points below the current level.
The all-time low for 30 year average mortgage rates was at 3.35 percent in December 2012. Today's average mortgage rate is only 99 basis points above the all-time low set over five years ago.
For years now, we have heard mortgage rates are moving higher and will continue to move higher. While that is technically true, the increases have been a lot lower than even the experts anticipated.
Forecasts for Average Mortgage Rates Have Been Wrong
A year ago, The Mortgage Bankers Association forecast 30 year rates to be at 4.80 percent by the 1st quarter of 2018, 46 basis points higher than the current rate. In the same forecast, the MBA had 30 year rates to be at 5.20 percent by the end of 2018.
In the most recent MBA forecast released last month, the 1st quarter 2018 forecast for average 30 year rates is at 4.4 percent. By the 4th quarter, the MBA forecasts average 30 year rates to be at 4.90 percent. When you compare the reports you can see the MBA has been lowering their forecasts.
The MBA has been lowering their forecasts for several years now. Looking back at a report from March 2014, 30 year rates were forecast to hit 5.00 percent by the end of 2014. As you know, we still haven't seen 5.00 percent rates on 30 year loans. You can see a list of mortgage rate forecasts going back to 2014 on the MBA's website: Mortgage Finance Forecasts.
To be fair to the MBA, the Federal Reserve's own economic forecasts have been wrong. The Fed's own economic forecasts have been too high and have subsequently been lowered. You can see a list of the Fed's forecasts by looking back at the FOMC Meeting Calendar.
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