We spoke to Mike Hendrickson, Sr. Mortgage Consultant at U.S. Bank to get his thoughts on mortgage trends for 2020. Here's what he had to say:
Experts predict low rates will last.
It’s a new year so everyone has an opinion on this year’s mortgage rates. Even though nobody has a crystal ball, experts believe rates will stay low in 2020. We saw in 2019 the average 30-year fixed mortgage rate started at 4.68% which represented a 5 year high. The year ended at an average of 3.93%. According to experts — and an opinion I share — rates should remain stable in 2020, and will hover not too far below (and not much higher than) 4.25%. My own forecast is for rates to stay within a range of 3.5% to 4.25% — at least up until the election.
What indicators should you watch for that might move the market to the bottom or top of that range? Keep an eye on the stock market. If it continues to rise, then rates will stay closer to 4% or above. This occurs because, as big money goes into stocks, it comes out of bonds which drives yields higher.
There are other factors that could impact rates for mortgages, so keeping in close touch with our team and your mortgage lender is important. Together, we can give you the best guidance for your situation and market factors.
Please note this discussion in no way represents a rate quote but rather is designed to give you tools to understand what drives rates and how to spot trends. Your specific rate also depends on a number of factors like down payment, credit score, etc.
This article was prepared by:
Sr. Mortgage Consultant