With experts predicting a 60 percent chance of a Fed rate hike by March, housing industry leaders along with buyers and sellers are waiting with bated breath to see if that prediction comes true. This is causing a growing number of Americans who plan on buying or selling a home to rethink their plans. According to a Redfin survey, nearly half of house hunters say they would feel a greater sense of urgency to buy a home if mortgage rates increase passed 3.5 percent.
Although mortgage rates have crept up slightly over the last several months from the all-time lows seen in the early days of the pandemic, they continue to remain historically low. Redfin’s Chief Economist Daryl Fairweather predicts that mortgage rates will reach 3.6 percent by the end of this year.
“Mortgage rates increasing will make homebuying less affordable. Over time, that will put the brakes on demand and put an end to double digit annual price growth,” said Fairweather. “But in the short term, this increase will light a fire under homebuyers and make for an extremely competitive January.”
Today, conforming no-point 30-year fixed mortgage rates are averaging 3.0 percent and 15-year rates are near 2.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (877) 700-0942 and your questions may be featured in an upcoming article.
