As the year is quickly coming to a close, many people are taking advantage of low mortgage rates, even despite mixed reports for jobless claims.
Summary: Where are mortgage interest rates expected to go up to the end of the year and into 2020? In this article, we’ll take a look at rate trends in Seattle to help you make a more informed decision about when to buy a home and take out a home loan.
On November 14, Freddie Mac reported that the average rate for a 30-year fixed mortgage landed at 3.75%. That’s good news for Seattle-area home buyers and mortgage shoppers, considering that this rate is still much lower than where rates started this year. But how long will rates stay this low? What’s the forecast for Seattle mortgage rates into 2020?
We’ll get to the long-range forecasts in a moment. First, let’s take a look at where we are right now.
Seattle Mortgage Rate Trends: Where We Are NowAs mentioned above, Seattle mortgage rates are currently hovering around 3.75%. 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. They then compile the average rates presented by those lenders, and publish the results. They’ve been doing this since the 1970s.
The chart above was published on November 14, 2019, along with the most recent survey results. It shows mortgage rate trends for the last 12 months, in three popular loan categories (5/1 ARM loan, 15-year fixed, and 30-year fixed). These rates are based on borrowers paying an average of 0.5 points at closing.
One thing will jump out at you right away. Current mortgage rates, shown on the far right side of the chart, are lower than they were at the start of 2019. Much lower, in fact.
So that’s where we are in the second week of November. Now let’s adjust the lens and look out over the horizon, with a forecast for Seattle mortgage rates.
Forecast for 2020
Recently, the Mortgage Bankers Association issued their latest forecast for mortgage rates, extending through the end of 2020.
Here are their quarterly predictions for average Seattle 30-year loan rates, between now and the end of next year.
- Q3, 2019: 3.7%
- Q4, 2019: 3.7%
- Q1, 2020: 3.7%
- Q2, 2020: 3.7%
- Q3, 2020: 3.7%
- Q4, 2020: 3.7%
According to this forecast, MBA expects the average rate for a 30-year fixed home loan to remain rather steady at 3.7% for the next year.
Also, Freddie Mac offered a mortgage rate forecast that was similar to the MBA’s outlook shown above. The company stated: “We have adjusted our quarterly forecast for the 30-year fixed-rate mortgage to remain around 3.6% through the second quarter of 2020. We project the annual average to be 3.9% in 2019, before sinking to 3.7% in 2020. We expect mortgage rates to follow Treasury yields with the 30-year fixed-rate mortgage averaging 4.2% in 2020.”
Related: Seattle housing market forecast
The Federal Reserve’s Rate Cuts
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 September, Fed officials decided to slash interest rates for the third time in 2019 as the US economy continued slowing amid ongoing trade issues with China.
In other words, there was no rate hike this time around. But who knows what will happen at the Fed’s next meeting.
General Consensus: A Gradual Rise Ahead?
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 2020. 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 sink much lower than they are now, and that they could rise through the end of the year. This is something to consider, if you’re planning to buy a home or refinance your existing loan.
Rate Quotes for Seattle-Area Mortgage Shoppers
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.
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