What's Going On with Mortgage Interest Rates?

Mortgage rates have been up and down between the high-3% and low-4% numbers recently. We often hear the question from potential buyers (and those refinancing) asking what the near future is for mortgage interest rates. Disclaimer: Neither Chris nor I are mortgage experts. But we know a few people who are, and like to pass the question on to them. I reached out to one of our favorite lenders for some info:

What About These Historic Interest Rates?

“We have seen mortgage interest rates reach new historic LOWS this last two years,” explained Bob Drake, Branch Manager of Integrity Home Mortgage in Frederick, one of our preferred lenders. “Thanks in part to world events like Brexit, we watched rates bounce around in the mid-3% ranges last year, unheard of since rates have been tracked.”

And how does that affect the market?

“Due to historically low rates, we’re seeing a continual stream of buyers enter the market. We’re doing our best to educate buyers, especially Millennial home buyers, on how low these rates really are,” says Bob. “We haven’t seen rates this low in 60 years…and then, our grandparents were paying 4%, which is still higher than today’s 3.7% rates. People need to understand that their buying power is the highest it will probably ever be.”

What About the Future of Interest Rates?

The Fed raised the benchmark interest rate at the end of last year, and we’ve been hearing for months that the Fed is going to raise it again, that we should be ready for higher mortgage rates. But it hasn’t really happened, at least not significantly. And when rates have moved up, they’ve come back down again.

What can we expect for the near future? Most experts agree that there are reasons why rates are not higher and probably won’t be going up significantly for the remainder of 2017: “Even if the Fed raises rates,” explains Bob, “it most likely won’t raise mortgage rates. Rates will remain low until the international market becomes stable. Honestly, predicting mortgage rates is nearly impossible these days because so many factors influence our financial system today.”

Internationally, things are not resembling stability.

For your research

Here are several sources of information on mortgage rate activity:

Bankrate.com has an interactive graphing tool that shows you what rates have done over a period of time. When you compare rates to several years ago…wow, you see what Bob was talking about above!

In most years, rates rise in the summer, and drift lower in the fall and winter. Without big economic news, this holds true, according to the writers at The Mortgage Reports Blog. One has to admit, we’ve had some big economic news recently and often.

Generally, mortgage rates go down when the economy is performing weaker than expected, and they go up when the economy heats up.

Some news that will affect mortgage rates:

Housing markets are up in sales, and many markets are reporting increasing values.
Consumer Confidence is not only up, but more than predicted.
Builders Confidence is up.
The Fed is positive about economic activity improving.
Interest rates and oil prices tend to move closely together, according to Dan Green at The Mortgage Reports.

See Today’s Rates