It’s beginning to look a lot like Christmas, so what does that mean for mortgage rates?
According to Nerdwallet’s daily rate survey, the December mortgage rates forecast is not entirely sunny, but it does also seem as if tumultuous storms or heavy rain are not in the near future. In fact, mortgage rates have shown a steady baseline throughout the past half-year, right around 4% APR, which leads experts to predict that the last month of the year will likewise follow suit and stay within a close one-eighth of a percentage point on either side of 4%.
There are several reasons for this welcomed stasis, including the fact that the economy has been meeting investors’ expectations, rather than throwing them curveballs with unforeseen surprises or rises and falls. More will be revealed once the Federal Reserve’s rate-setting committee convenes on December 10 and 11. However, the anticipated result of this meeting is for short-term interest rates to remain as is.
On the heels of Nerdwallet’s predictions came a report from Freddie Mac as they released its Primary Mortgage Market Survey, which divulged that the 30-year fixed-rate mortgage averaged 3.68%. The company’s Chief Economist Sam Khater explained that “this week the economy sent mixed signals, leaving mortgage rates unchanged.”
Realtor.com’s senior economist George Ratiu offered further insight on the Freddie Mac report, explaining, “the White House’s comments about the trade war with China sent markets into selloff mode this week. However, stocks recovered during Wednesday trading, placing investors in a wait-and-see mode, and keeping mortgage rates unchanged at 3.68% for conventional 30-year loans. Rates are well below levels seen a year ago, placing buyers in a good position to qualify for mortgages.”
Ratiu went on to share that, “the outlook remains cloudy for housing, despite improved affordability, as extremely tight inventory is squeezing activity, especially at the lower end of the market. Based on realtor.com’s 2020 Forecast, home sales are expected to decline next year with 25 of the largest 100 markets projected to undergo price drops. The silver lining continues to be that mortgage rates are likely to remain low, averaging 3.85% over 2020.”