The short holiday week brought a flurry of economic reports last week. Highlights included pending home sales, the S&P Case-Shiller Housing Market Indices and the FHFA home price index. No reports were released on Thursday and Friday in observance of the Thanksgiving holiday.
Mortgage Rates in Washington State and nationwide have risen over the past few weeks. The average rate for a 30-year fixed home loan settled at 4.71% during the first week of October 2018. Looking forward, industry analysts are predicting they’ll reach the 5% mark sometime around the middle of 2019.
Home Loan Rates Hit a Seven-Year High
On September 27, 2018, Freddie Mac reported the latest results of its long-running mortgage rate survey. They query banks and lenders across the U.S. to come up with an average.
During that last week of September, the average rate for a 30-year fixed mortgage rose to 4.72%. That was its highest level since April of 2011, and it came after five consecutive weeks of increases. In this week’s reading (October 4, 2018), average rates eased a bit to land at 4.71%.
At the start of 2018, the 30-year fixed mortgage rates were averaging 3.95%. They have followed a more-or-less upward trend since then, despite the occasional weekly drop.
There are several factors influencing this trend, ranging from Federal Reserve policy changes to improvements within the broader economy.
So that’s where we are now, as of October 2018. But what about the long-range outlook?
Mortgage Rates Predicted to Reach 5% in 2019
The latest forecasts suggest that mortgage rates in Washington and elsewhere in the U.S. could continue to inch upward between now and this time next year. These predictions were issued by analysts at the Mortgage Bankers Association (MBA) and Freddie Mac.
On September 19, 2018, the MBA’s research team published its forecast for the housing and mortgage industries. Among other things, they predicted that the average rate for a 30-year fixed mortgage in Washington and nationwide would rise gradually over the coming months.
Here are the MBA’s quarterly predictions for 30-year loan rates next year:
- Q1, 2019: 4.8%
- Q2, ’19: 4.9%
- Q3, ’19: 5.1%
- Q4, ’19: 5.2%
Economists from Freddie Mac issued a similar forecast in September, predicting that 30-year loan rates would end up averaging 5.1% during 2019.
Granted, such predictions are the equivalent of an educated guess. So we shouldn’t get too wrapped up in the precise numbers being projected here. It’s the big-picture consensus that’s more noteworthy. And the consensus among experts is that mortgage rates in Washington and nationwide will climb gradually through the end of this year and into 2019.
Meanwhile, home prices across Washington State continue to climb to varying degrees. The statewide median home value rose to around $371,000 as of September 2018. That was a gain of 7.5%, according to Zillow’s data. Prices are much higher than that, on average, in the Seattle metro area. Seattle’s median home value was around $750,000 when last measured.
The bottom line: Buyers who are planning to buy a home in Washington State in the near future might want to keep an eye on these trends, and consider purchasing sooner rather than later. Otherwise, they could encounter higher housing costs down the road.
Disclaimer: This article contains forecasts issued by third-party sources not associated with our company. We have gathered them here as an educational service to our readers.