Future Direction of Mortgage Rates

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Future Direction of Mortgage RatesFor the past decade, since the Financial Crisis and Great Recession, mortgage rates have been at or near historical lows. Fixed long term mortgage rates started moving higher in 2018 as economic growth picked up and long term bond yields moved higher. 30-year mortgage rates were nearing 5.00 percent and 15-year mortgage rates were around 4.30 percent.

This year, mortgage rates started to decline again as trade war and recession fears mounted. Those fears accelerated recently, as 10-year bond yields plummeted around 150 basis points. The decline sent average long term mortgage rates down 100 basis points in a matter of weeks.
Loan Type
Purchase    Refinance
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Loan Amt Points FICO % Down
in 06101, All points, 740    Sort by:
Cost & Fees
PERIOD_FIXED_30YEARS Mortgage Loan from Rocket Mortgage
Rocket Mortgage
Rocket Mortgage Logo
NMLS # 3030
at 2.000 pts
45 day lock rate
Est payment: $1,306
Fees in APR: $7,250
From the lender: We can close your loan in less than a month!
PERIOD_FIXED_30YEARS Mortgage Loan from Quicken Loans NMLS #3030
Quicken Loans NMLS #3030
Quicken Loans NMLS #3030 Logo
NMLS # 3030
at 2.000 pts
45 day lock rate
Est payment: $1,431
Fees in APR: $7,250
The Better Business Bureau gives Quicken Loans and A+ for customer service.
Data provided by Brown Bag Marketing, Inc. Payments do not include amounts for taxes and insurance premiums. Click here for more information on rates and product details.

Current 30-year mortgage rates are averaging 3.74 percent and 15-year mortgage rates are averaging 3.21 percent. As you can see, current mortgage rates are well below levels from earlier this year and current rates are also at lows for 2019.

30-year jumbo mortgage rates were also hovering just below 5.00 percent towards the end of 2018 are now averaging 4.07 percent. 15-year jumbo rates are currently averaging 3.81 percent, down from around 4.65 percent at the start of 2019.

Short term adjustable conforming mortgage rates have also moved lower recently but the declines haven't been as pronounced. Average 5-year adjustable rates started 2019 around 4.00 percent and are currently averaging 3.38 percent.

The ongoing trade war between China and the United States is slowing down economic growth across the globe and is forcing interest rates lower as well. This trade war and the chance of a recession over the next year will prevent mortgage rates from moving much higher from current levels.

If there is a recession in 2020, mortgage rates will hit new all-time lows. Conforming 30-year mortgage rates could fall below 3.00 percent and 15-year conforming rates could fall as low as 2.25 percent. Jumbo mortgage rates would also fall as low as conforming rates.
Author: Brian McKay
October 1st, 2019