2019 Mortgage Rate Predictions

2019 Mortgage Rate Predictions: What Do the Experts Think?

In almost every industry, there are a few companies that dominate the market, and very few of the major players agree on what the future will bring. However, when it comes to 2019 mortgage rate predictions, all six of the biggest housing authorities in the nation are on the same page. If you’re thinking of buying a house this year – whether it’s your first or your 15th, be sure to consider the data below.

What Does the Average Interest Rate Look Like in 2019?

According to The Mortgage Reports, a leading mortgage blog, the leading six housing authorities surprisingly agree on what 2019’s average mortgage rate will look like across the board. The six authorities included in their report are Fannie Mae, Freddie Mac, Mortgage Bankers Association (MBA), the National Association of Home Builders (NAHB), the National Association of Realtors (NAR), and Realtor.com. The results ranged from 4.8% as predicted by Fannie Mae to right at 5.5%, the number forecast by Realtor.com. The average predicted interest rate across all six is 5.17%. Notably, Fannie Mae is the only one predicting rates under 5%.

Reasons for the Increase in the Average Mortgage Interest Rate

When probed for the reasoning behind their predictions, the housing authorities agreed on some points, but disagreed on others. For example, Paul Bishop, who serves as the Vice President of Research for the NAR, says that the group is anticipating economic growth throughout 2019. As history has shown, average mortgage interest rates tend to follow the economy; when the economy is up, mortgage rates climb, and when it is down, they start to sink.

The MBA, on the other hand, was even more specific with the reasoning behind its prediction. While it also noted that the strengthening economy will boost mortgage rates throughout the year, Mike Fratantoni, the MBA’s Chief Economist and Vice President of Economic and Industry Forecasting, says that the low unemployment rate will also play a role. He says the MBA predicts that the Federal Reserve will raise their rate three times throughout the year due to these factors, which will cause mortgage rates to rise.

Should You Buy Now?

With all this talk of increasing mortgage rates, and with the six leading housing authorities in the US closely mimicking one another’s predictions, many potential buyers find themselves wondering if they should buy now rather than wait until later in the year. While it’s true that interest rates as low as 3% were available just a few short years ago, experts believe the recovery from the housing market crash will continue to drive rates up, as will the economy, low unemployment rates, and other factors. As of early February 2019, mortgage rates are still holding below 5%, so now is the time to make a move if you’re interested in becoming a homeowner.

Mortgage rates fluctuate from time to time and there’s little doubt that they will continue to rise throughout 2019. As long as the American economy remains strong, and as long as the Federal Reserve continues to see the benefit in raising interest rates for mortgages, this trend will likely continue well beyond 2019, too.