An Update on Mortgage Rate Trends for 2020
If you’re planning to enter the home market in 2020, mortgage rate trends should be a major point of interest. If you’re going to obtain a mortgage loan when you make your home purchase – and most buyers do obtain loans – your mortgage interest rate will have a huge impact on your financial situation. Your mortgage rate will directly influence your monthly payment and, by extension, the total amount you will pay over the entire course of your loan. This is why you need to keep track of where mortgage rates are heading.
The particular rate that you receive when you acquire a loan will depend on many factors; some of these factors are beyond any one person’s individual control. Certain macroeconomic factors, such as the bond market, for instance, play a big role in determining mortgage rates throughout the country. There are other factors, such as credit score and employment status, over which a given person has much more control. In this post, I’d like to talk about expert opinions on mortgage rate trends for the year 2020. To start, I’ll go over briefly what occurred in 2019, and then continue by discussing current opinions on what’s likely to occur this year.
2019 Was a Good Year for Buyers
Fortunately for buyers, mortgage rates saw sizable decreases during 2019. At the start of 2019, mortgage rates averaged around 4.68%. From this peak of 4.68%, the average mortgage rate declined to a low of 3.74% in early September. The decline between January and September was more or less steady, although there were a few ups and down scattered about during this period. From this low point of 3.74%, rates bumped up and down a bit more until reaching the final point of 3.93% at the end of 2019. This trend in 2019 is pretty encouraging for buyers. Rates more or less consistently declined throughout the year, and ended on a point (3.93%) which is fairly attractive for buyers.
Rates Likely to Hover Around 4% in 2020
In contrast to the sizable declines seen in 2019, experts predict that the average mortgage rate will hover quite closely to the 4% mark throughout the year. In other words, rates will be more stable in 2020, and this is very good news for potential buyers because the rates will be relatively low. Of course, there is no guarantee that rates will remain stable around this point, but most reliable indicators suggest that this will be the case. Potential buyers also need to keep in mind that low rates can create some unexpected complications. For instance, low rates can sometimes cause home prices to increase, which means that the financial benefit conferred by the low rates can be diminished. But this is also not a guarantee. On the whole, most reliable signs suggest that 2020 will be a favorable year for buyers, and so those who’ve been waiting on the sidelines may want to jump in.
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