In a previous blog post, we talked about how the real estate market in Washington State could change between now and 2019. The takeaway was that home prices will almost certainly be higher next year than they are right now, but buyers might have more inventory to choose from as well.
Mortgage rates play an important role here as well. Will mortgage rates in Washington be higher in 2019 than they are right now? The general consensus appears to be yes.
Will Home Buyers See Higher Mortgage Rates in 2019?
First a disclaimer: Nobody can predict future mortgage rate trends with complete accuracy. Housing analysts and economists tend to use current market trends to project into the future. Sometimes they’re accurate — other times they’re not.
But when you have a wide range of voices saying the same thing, it might be worth paying attention to. And right now, those voices are saying that mortgage rates will gradually rise between now and 2019.
Let’s start with Freddie Mac. In addition to maintaining a weekly survey of mortgage rates nationwide, the company also has a team of dedicated analysts that project future housing trends. It’s their view that mortgage rates in Washington State and nationwide will be higher in 2019 than they are right now.
In its latest long-range forecast, Freddie Mac’s economic research team predicted that mortgage rates for a 30-year fixed home loan will end up averaging 4.6% for 2018, and will rise to an average of 5.1% in 2019.
Similarly, the real estate data company CoreLogic recently wrote: “A consensus forecast suggests mortgage rates will rise by about 0.46 percentage points, or 46 ‘basis points,’ between March 2018 and March 2019.”
And then we have the Mortgage Bankers Association, an industry group that also has a team of in-house economists who monitor these trends. In their latest forecast, they predicted that the average rate for a 30-year home loan would climb above the 5% threshold during the first part of 2019.
Rates Fairly Stable During Summer 2018
Over the summer of 2018, we’ve seen some relative stability. The average rate for a 30-year loan hovered just about 4.5% through June, July, and the first part of August. That’s where we are right now, as of August 2018.
If mortgage rates do rise between now and 2019, it probably won’t be a huge jump. Most of the forecasts we have seen predict an increase of around 50 basis points over the next year or so. Still, that could be enough to create a sense of urgency for those home buyers and homeowners who want to lock in the lowest possible rate.
Rising Home Prices Command Attention
It’s also important to realize that experts are predicting a continued rise in home prices across the state of Washington. While house values have slowed down a bit, they’re still rising in real estate markets across the state.
Of course, rising home values mean different things to home buyers and homeowners. Those who are in the market to buy a house might want to consider purchasing sooner rather than later, to avoid higher costs. Homeowners, on the other hand, have been enjoying unprecedented levels of equity growth over the last few years.
Disclaimer: This article includes mortgage rate projections provided by third parties not associated with our company. We have gathered and presented them here as an educational service to our blog readers.
Have questions? Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region. Please contact us if you have mortgage-related questions.