It's been a great year for consumer mortgage rates however as we finish out 2019 mortgage rates are moving higher. And the move is not completely unexpected. Fannie Mae and Freddie Mac fixed rate mortgage programs still offer rates well below the levels seen back during the last three months of 2018. At that time some lenders were offering 30 year fixed rates above 5.00% and 15 year fixed mortgage rates in the mid 4's. Times have definitely changed.
What Will Mortgage Rates Due In 2020:
Great question! Unfortunately there is no easier answer if mortgage rates move lower or higher in 2020. The general industry view point is that mortgage rates should remain steady as the economy sees some improvement in 2020. With the phase one trade deal done along with the UMSCA trade deal many investors and corporations are optimistic that the economy will improve as we move into the the Presidential election year.
But be careful though; there are many instances throughout history in which the Fed, companies and investors were optimistic the economy was going to improve. Look no further than 2018; when the Fed was raising rates and most people believed 2019 was going to be banner year for the economy. It wasn't though; the stock market did well however the economy started to shed important manufacturing jobs; employment slowed along with corporate earnings.
Could mortgage rates move to new lows?
Absolutely but that's unlikely. A number of factors would have to happen to see mortgage rates move to new all time lows. Generally speaking the lowest 30 year fixed rate seen in the last 40-50 years was around 3.375% and the lowest 15 year fixed rate is around 2.75% (zero points, typical closing cost structure). On the flip side there are risks to rates moving back above 5.00%. A stronger economy, increasing wages and higher inflation are all risks to mortgage rates moving higher in 2020.
How To Plan Ahead:
If you are looking to refinance your mortgage or purchase a home it's very important you take the time to plan ahead. Know your credit score, income and debt before you start shopping around for a quote. And it's important to be realistic. If you have less than perfect credit you won't get the best terms and if you have excellent credit know that lenders will offer the best market rates they can but for the most part they won't go below that. It's important to work with a reputable company and a loan officer with a verified history of at least five years in the mortgage industry.