Recent mortgage rate forecasts suggest that borrowers in Washington State could encounter higher borrowing costs over the coming months. But we probably won’t see a major spike in interest rates anytime soon.
In fact, the Mortgage Bankers Association (MBA) recently reduced its long-term forecast for mortgage rates in Washington and across the country. The industry group now expects the average rate for a 30-year fixed home loan to reach 4.4% by the fourth quarter of 2017.
Washington State Mortgage Rate Forecast Through 2018
At the start of this year, the average rate for 30-year fixed home loan was sitting at 4.20%. That’s based on the weekly market survey conducted by Freddie Mac, the government-sponsored corporation that buys and sells mortgage loans.
Earlier today, Freddie Mac reported that the 30-year mortgage rate average had dropped to 3.90%. That’s quite a bit lower than where it was at the start of the year.
This flies in the face of previous predictions and has caused some uncertainty among forecasters. At the end of last year, many housing analysts and economists were predicting that mortgage rates in Washington and nationally would rise gradually throughout 2017. But over the last few weeks, rates have been fairly stable, and they are lower now than at the start of 2017.
Perhaps this is why the latest mortgage rate forecast for Washington State, and the nation as a whole, have been revised downward.
- In its latest finance forecast, the Mortgage Bankers Association predicted that the average rate for a 30-year fixed home loan would rise to 4.4% by the fourth quarter of 2017.
- In their previous forecast, issued last month, the industry group predicted an average of 4.6% by the fourth quarter of this year.
So they have revised their projection downward, partly based on the recent stability we have seen in mortgage rates.
Granted, these are just forecasts and predictions, so you probably shouldn’t “bank” on them. But at the least, it’s good to know what the experts expect over the coming months.
Home Prices Still Rising, Though More Slowly
Home prices across Washington State have risen steadily and sharply over the last couple of years. In fact, Washington was recently singled out as having the fastest rising home values of any state in the country.
And while prices appear to be slowing down a bit, they are expected to continue rising to some degree over the next year. And probably beyond that as well.
This is partly the result of supply shortage. The number of homes for sale across the state — particularly within the Seattle metro area — has declined significantly over the last few years. Meanwhile, there are more buyers in the market looking for homes purchase.
This supply and demand imbalance has driven prices north a rapid pace. Housing analysts and economists, including those at Zillow, have predicted that home prices in the state will continue to rise between now and this time next year.
Given the latest forecasts for home prices and mortgage rates in Washington, a strong case could be made for buying a home sooner rather than later. If either or both of these predictions turn out to be true, buyers who postpone their purchases until 2018 could encounter higher housing costs.
Disclaimer: This article contains predictions and forecasts relating to home prices and mortgage rates. These projections were offered by third parties not associated with our company. We have presented them here as an educational service to our blog readers.