Where are mortgage interest rates expected to go throughout 2021? Understanding the mortgage rate trends in Seattle can help you make a more informed decision about when to buy a home and take out a home loan.
On January 22, 2021, Freddie Mac reported that the average rate for a 30-year fixed mortgage landed at 2.77%. That’s good news for Seattle-area home buyers and mortgage shoppers, considering that this rate is still much lower than where rates were at a year ago. But how long will rates stay this low? What’s the forecast for Seattle mortgage rates into 2021?
We’ll get to the long-range forecasts in a moment. First, let’s take a look at where we are right now.
As mentioned above, Seattle mortgage rates are currently hovering around 2.77%. These are average rates for 30-year loans, based on the weekly survey conducted by Freddie Mac. They solicit input from lenders across the country, including the Seattle metro area.
Freddie Mac then compiles the average rates presented by those lenders, and publishes the results. They’ve been doing this since the 1970s.
The following are the rates for different mortgage types in the third week of January 2021, according to Freddie Mac:
By contrast, compare the above rates to those from the same week last year:
One thing will jump out at you right away. Current mortgage rates are lower than they were at the start of 2020. Much lower, in fact.
So that’s where we are in the third week of January 2021. Now let’s adjust the lens and look out over the horizon, with a forecast for Seattle mortgage rates.
The National Association of Realtors (NAR) expects mortgage interest rates to average 3.1 % in 2021, while the Mortgage Bankers Association (MBA) expects rates to average 3.1%.
Also, Freddie Mac offered a mortgage rate forecast that was similar to the MBA’s outlook shown above. The company stated that they expect rates for 30-year fixed-rate mortgages to average around 3%, which is unchanged from their forecast from 2020.
Related: Seattle housing market forecast
The Federal Reserve has something to do with all of this. While the Fed does not control mortgage rates directly, they do control the shorter-term federal funds rate (which banks use when transferring balances). So the Fed’s monetary policies can have an indirect influence on mortgage rates.
The Fed has held the federal funds rate near 0% for the last few years, as part of a broader economic stimulus plan. Indirectly, this has helped keep mortgage rates near historic lows.
During one of their latest scheduled meetings in November, Fed officials decided to hold the interest rate near 0% as the US economy continued slowing amid ongoing the coronavirus pandemic.
In other words, there was no rate hike this time around. But who knows what will happen at the Fed’s next meeting.
So what’s the general consensus here? Based on these and other sources, the forecast for Seattle mortgage rates could best be described as maintaining a steady level between now and the end of 2021. But again, this is just a forecast. It’s the equivalent of an educated guess. A highly educated guess — but a guess nonetheless.
The point is that we probably shouldn’t expect mortgage rates to increase much in the next few months, but rather to remain low. This is something to consider, if you’re planning to buy a home or refinance your existing loan.
Are you a Seattle home buyer preparing to make a purchase, or a homeowner planning to refinance? We can provide you with an instant rate quote to help you move forward. We can also answer any questions you have about the different types of home loans, and which one might be best suited to your situation. We offer a variety of loan options, including FHA, VA and conventional.
Sammamish Mortgage has been proudly serving borrowers in the Seattle metro area for more than 20 years, and we welcome the chance to help you as well!
Disclaimer: This article includes mortgage rate forecasts and predictions from third-party sources not associated with our company. We have simply compiled this information as an educational service for our readers. Mortgage rates tend to vary based on geography, loan features, and credit qualifications. Please contact us if you would like to receive a quote.
Sammamish Mortgage is a local mortgage company serving the broader Pacific Northwest region, including Washington state, Idaho, Colorado, and Oregon. We are proud to offer a wide variety of mortgage programs and products with flexible qualification criteria, and have been doing so since 1992. Please contact us if you have any questions or are ready to apply for a home loan.
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