Mortgage Rates May Go Even Lower in 2020!Homebuyers can rest assured they’ll still get agreat deal on a mortgagethis year, even if they’re paying a high price for the actual home.In a
Feb 1 2020 38376 2
Mortgage Rates May Go Even Lower in 2020!
Homebuyers can rest assured they’ll still get agreat deal on a mortgagethis year, even if they’re paying a high price for the actual home.
In a neweconomic outlook, mortgage titan Fannie Mae says it expects mortgage rates to remain low and stable throughout 2020.
The company’s brother firm, Freddie Mac, recently revealed 30-year fixed mortgages averaged just 3.9% throughout 2019, making it the fourth-lowest year on record.
In its forecast, Fannie Mae says it expects this year’s rates to be even lowerat just 3.7%, while five-year adjustable rate mortgages are likely to hold at 3.3%.
Match that with “strong labor markets, rising wages and improved household balance sheets,” and conditions look greatfor prospective homebuyers. Yet the usual hitch remains: There’s never enough homes on the market.
It’s still a seller’s market because the growth in supply, while it’s accelerating, still hasn’t caught up to the growth in demand.
The near-record number of adult children living at home will eventually try to get their own places, meaning demand will only continue to surge.
“Boomers are not moving, so the existing home supply is still at very low levels,” he says.
In its outlook released Jan. 21, Fannie Mae notes that the number of homes for sale was down 5.7% in November compared to the year before, making it the scantest November in at least 20 years.
And while the number of purchases remains flat, Fannie Mae says all of those factors — meager supply coupled with a strong job market spurring demand, are sending prices skyward.
The U.S. median price for an existing home in November was $271,300, up 5.4% from the same month the year before, according to the National Association of Realtors. That marks 93 straight months of gains.
The decline in interest rates is partly responsible. Lower rates mean people can take out bigger mortgages while keeping their monthly payments the same.
That ends up pushing up house prices, because people end up bidding a little more.
Call me to find out what the current interest rates are for your home purchase by calling Jack Lees at 818 262-0924.