Homebuyers have enjoyed low mortgage rates throughout 2015 and 2016. Now, it’s time to expect some changes in the new year and post elections. However, if you’re planning to buy a home this year, you’re at the right place. Today, I’ll share some of the predicted mortgage rate changes in 2017.
Forecasting mortgage rates in 2017
Have a look below and clear all your doubts regarding changes in mortgage rates in 2017.
Fannie Mae
According to the monthly Economic and Housing Outlook report published by Fannie Mae, mortgage rates will be low in 2017 and also in 2018.
In the 1st half of the year 2017, 30-year mortgage rates will be about 3.6% and it’ll rise to 3.7% by the end of the year.
Mortgage rate prediction by Fannie Mae:
| 30-Year Fixed Rate | 2017 | 2018 | Q1 | 3.6% | 3.7% |
|---|---|---|
| Q2 | 3.6% | 3.8% |
| Q3 | 3.7% | 3.8% |
| Q4 | 3.7% | 3.8% |
Source: http://themortgagereports.com/
As per Fannie Mae’s December Housing Forecast, the average 30-year fixed rate mortgage (FRM) will be 4.1% in the first 3 quarters of 2017 and will rise to 4.2% in the last quarter of this year.
Freddie Mac
Freddie Mac’s prediction of mortgage rate is not strikingly different from Fannie Mae. According to Freddie Mac, the 30-year mortgage rate will be 3.7% in 2017. However, it predicted that interest rates will be 4.3% at the end of 2017.
Mortgage rate prediction by Freddie Mac:
| 30-Year Fixed Rate | 2017 |
|---|---|
| Forecast | 3.7% |
Source: http://themortgagereports.com/
As stated in Freddie Mac’s December outlook report, the average 30-year fixed rate mortgage will be 4.2% throughout 2017 and the rate will increase to 4.5 in 2018.
30-Year, 15-Year and 5/1 ARM mortgage rates forecast
As reported by Freddie Mac’s Primary Mortgage Market Survey (PMMS), the average 30-year conventional fixed mortgage rate started at 4.32% on January 2017. However, the 15-year mortgage started at 3.55%.
According to Zillow, as of 10th January 2017, the current average 30-year FRM is 3.89%. The current national average 15-year FRM is 3.08%. And, the current national average 5/1 adjustable-rate mortgage (ARM) is 3.02%.
As per the Mortgage Bankers Association, the average 30-year FRM will be 4.7% in the last quarter of 2017, which will increase gradually throughout the year.
The National Association of Realtors predicted the 30-year FRM would be around 4.6% at the end of 2017.
Mortgage rates will increase as per Kiplinger, the business forecaster and personal finance advisor.
Mortgage rate prediction by Kiplinger:
| 30-Loan Type | 2017 |
|---|---|
| 30-Year fixed | 4.3% |
| 15-Year fixed | 3.6% |
Source: http://themortgagereports.com/
Impact on first-time homebuyers
From the above discussion, it’s clear that interest rates will increase by the end of the year. This rise in mortgage rate may create difficulty for first-time homebuyers. Well, it doesn’t mean that they can’t purchase a home. Of course, they can purchase one.
According to experts, since people tend to live for 5 years or less in their first home, and leave the house before the commencement of their first adjustment rate, first-time homebuyers will be benefitted if they invest in a 5/1 ARM plan. Because mortgage rates will be fixed at low for the first 5 years and then the rate will adjust yearly thereafter.
Check out today’s mortgage rate
To conclude it can be said that...
Whatever the mortgage rates will be in the days to come, one should sincerely try to stay current on the loan to repay it within the stipulated period.