Washington State has a fairly large military population, which means there are a lot of folks who could benefit from the VA mortgage loan program. And the program’s popularity seems to be rising.
But we’re nearing the end of 2017, so many home buyers are looking ahead to 2018. Which brings us to the question of the day: What will Washington VA loan rates do in 2018? What’s the forecast or outlook for mortgage rates next year?
Here’s the short version: Economists from several mortgage industry groups have predicted a gradual rise in conventional and VA loan rates during 2018. But they don’t expect to see any rate “spikes” or rapid increases anytime soon.
Forecast for Washington VA Loan Rates in 2018
According to the weekly industry survey conducted by Freddie Mac, the average rate for a 30-year fixed home loan was 3.92% percent during the week ending on November 22, 2017. Thirty-year conventional and VA loan rates in Washington have been hovering below 4%, on average, for many weeks now (as of November).
The question is, what can borrowers expect in 2018? The general consensus appears to be that VA loan rates in Washington could gradually rise over the coming months.
On November 20, 2017, Freddie Mac’s economic research team updated their long-range outlook for the U.S. housing market and broader economy. Among other things, they offered an updated forecast for VA and conventional mortgage rates over the next couple of years. They expect 30-year mortgage rates to end up averaging 4.0% for 2017 … 4.4% in 2018 … and 4.7% in 2019.
To quote their report: “We forecast that interest rates will remain low by historical standards, but gradually creep higher over the next two years [2018 and 2019].”
This forecast applies to both conventional and VA loan rates in Washington State, and nationwide.
The Mortgage Bankers Association (MBA) offered a similar forecast in November, breaking it down by quarter. Here is their quarterly outlook for average 30-year mortgage rates through the end of 2018.
- Q1, 2018 — 4.3%
- Q2, 2018 — 4.5%
- Q3, 2018 — 4.7%
- Q4, 2018 — 4.8%
Looking even further out, the industry group expects 30-year rates to reach 5% by around the middle of 2019.
Rising Home Values Another Concern for Borrowers
Bearing in mind that forecasts are the equivalent of an educated guess, the general consensus is that rates will rise gradually throughout 2018. Home prices, on the other hand, might deserve more attention from home buyers who are planning a purchase for next year.
House values in Washington State have risen significantly over the last couple of years, outpacing every other state in the country. According to multiple sources, the statewide median home value is currently around $345,000, following double-digit gains over the last year alone.
House values appear to be slowing down a bit, as we near the end of 2017. But they are expected to continue rising to some degree over the coming months.
So, we have several forecasts that suggest higher housing costs might be on the horizon. Both home prices and VA loan rates in Washington State could rise gradually throughout 2018. Collectively, these predictions make a strong case for buying a home sooner rather than later.
Disclaimer: This article includes various forecasts relating to conventional and VA loan rates in Washington and nationwide. These predictions were gathered from third-party sources not associated with our company. We have presented them here as an educational service to our blog readers.