Breaking News! Release of 2019 and 2020 mortgage rate predictions

October 2018 forecast: Mortgage rate at 5.6% in 2020

Oct. 29, 2018 5:34 PM ET|About: |By: Liz Kiesche, SA News Editor

 

Predicted Mortgage Rates: 30-year fixed-rate mortgage rates to rise to 5.1% in 2019 and 5.6% in 2020, up from expected average rate of 4.5% this year, according to the October Forecast.
 

 

How high will payments go with the higher rates?
4.50% was the Average rate for 2018
5.1% in 2019 (+$49/month on a $300,000 Loan Amount)
5.6% in 2020 (+$143/mo. on $300K LA)
If take into consideration the increase in value (see below)
the payment increase in 2020 is estimated to be +$153 higher.




Home prices are expected to increase 5.4% in 2018 with the growth rate slowing to 4.6% in 2019 and 2.9% in 2020.

 Home price increases on a home valued at $331,100 (Dec 2017):

Value at the end of 2018=+5.4%= $350,000

Value at the end of 2019= +4.6% = + $16,100= $366,100

Value at the end of 2020= +2.9%= +$10,600= $376,700 home

Total of a $45,600 increase in value in THREE years!





 

Total home sales--new and existing--are now forecasted to decline modestly this year to 6.07M, and then increase 1.8% to 6.18M in 2019 and rising 1.1% to 6.25M in 2020.





 

 

                                                     
                                                     
Summary statement: 

"While we expect the weakness in housing activity to extend the next few months as the market absorbs the recent uptick in mortgage rates, the combination of strong economic growth and millennials moving toward homeownership should help home sales regain momentum and rise modestly in 2019," says Chief Economist Sam Khater.

                       

Marty Qualls
Cell 801-540-5108
email: mqualls@primeres.com

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Modify your loan:
If you are late on payments or going through tough times, you might qualify for a loan modification through various programs.  Whether PRMI is your loan servicer, or if you make your payments to someone else, loan modification is an excellent opportunity for you to work out a program to enable you to stay in your home!  

Depending on the program, you could qualify for a reduced interest rate, forgiveness of part of the principal, or an extended loan period and lower monthly payment. Check out various programs on MakingHomeAffordable.gov or contact your mortgage servicer.



Marty Qualls
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What can cause mortgage rates to go up?

Federal Reserve Chairman Jerome Powell testified in front of the House Financial Service Committee on the State of the U.S economy.  Wages have increased 2.9% year over year in January (after a dismal 2.5% average in 2017) and as wage growth continues, businesses will need to fund this growth with higher product prices.  This will contribute to inflation.  Inflation hurts bond values and when bond prices go down, rates go up. 

The Mortgage Bankers Association (MBA) continues to predict that there will be four short term borrowing rate increases this year (what the government charges banks for overnight loans).  These rate changes will create ongoing volatility in mortgage rates.  The MBA has also predicted an average rate of 4.80% in the 4th quarter, 2018.

According to S&P Case Shiller, December saw home prices increasing and February consumer confidence hit the highest level since November, 2000.  Wage increases, higher product prices, home value increases and consumer confidence at a multi year high predict increasing mortgage rates. 

Here's where all of this information took me this morning:

This morning, I calculated an increase of $47/mo in house payment at a future 4.8% interest rate versus what we have available today.  My client this morning was wondering if buying now or waiting until the end of the year made the most sense considering they are locked into a rental contract until year end? 

Mortgages with Marty in Utah!
 

Something else to consider would be home value appreciation and a higher sales price of $15,600 (considering a 6% home value appreciation per year).

With higher rates and higher sales prices at year end, my client is now wondering if it makes sense to break their lease early and purchase now?

If you would like to review your options to purchase or refinance, give me a call at 801-540-5108. 

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Today's rates and what it means for January 2018?

Today's Rates Mortgage rates today have opened unchanged, as investors ignored this morning's financial reporting and continued to wait for Friday's Employment Report. The Institute For Supply Management released its ISM Manufacturing Index for December. The index tracks where production managers in the US feel their business is heading -- anything over 50 means business is increasing. Experts anticipate that the index will drop slightly from last month's 58.2 to 58.0. We got a rise, however, to 59.7. This could hurt rates if anyone pays attention to it -- the report is known to be volatile.

Manufacturing and production output (as well as the feeling business has about the future of the economy) is a predictor or WHEN inflation will start.  In my experience over the years, I have seen this increase in the ISM a preview of increasing rates (inflation). 

Purchase or Refinance:online application

Marty Qualls
801-540-5108
mqualls@primeres.com


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Rate forecast for January 2018

 

It's a new year, but a similar story from years past is on repeat. Mortgage rates are low, but not for long. Just about every analyst out there is calling for higher rates in the new year. The economy is breaking records, and a freshly minted tax code could induce economic expansion, but also inflation. All these factors are bad for mortgage rates. The good news, though, is that rates are surprisingly steady in the face of overarching changes like the new tax law. A golden opportunity still exists for those who are looking to buy or refinance a home in 2018.

 

Marty Qualls  801-540-5108 mqualls@primeres.com

Conforming Mortgage Loan Limits for 2018 increasing!

New Conforming Loan Limits in 2018

The Federal Housing Finance Agency (FHFA) announced new maximum loan limits effective January 1, 2018 for conforming loans.

In most of the U.S., the 2018 maximum conforming loan limit for one-unit properties will be $453,100, an increase from $424,100 in 2017. Higher loan limits will be in effect in higher-cost areas. New loan limits, however, will not take effect in 71 counties or county equivalents around the country.

What prompted this change? The Housing and Economic Recovery Act (HERA) requires that the baseline conforming loan limit be adjusted each year to reflect the change in the average U.S. home price.

On November 28, FHFA published its third quarter 2017 House Price Index report, which included estimates for the increase in the average U.S. home value over the previous four quarters. According to the report, house prices increased 6.8 percent, on average, between the third quarters of 2016 and 2017. Therefore, the baseline maximum conforming loan limit in 2018 will increase by the same percentage.

With home prices on the rise, the conforming loan limit increase opens up opportunities and helps keep home loans more affordable for more Americans.

If you'd like to learn more about these new loan limits or other loan products, please get in touch with me today. I'm happy to help!


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When is the "perfect" time to lock your mortage rate?

Know How To Recognize A Good Mortgage Rate

Mortgage lenders are often asked if there is a best time of day, day of the week, or period of the year when a prospective borrower should lock in a mortgage interest rate. 

The truth is, no one can tell with any degree of accuracy what rates will do.
In fact, the best time to lock a mortgage is when the unexpected happens.

Case in point: Brexit
Recently, Britain voted to exit the European Union. “Brexit,” as it is known, caused an international "flight to quality," meaning investors worldwide sought perceived safe assets like U.S. mortgage bonds. Mortgage rates fell dramatically.
These unforeseen shifts are the best time to lock a mortgage. But what if you’re not fortunate enough to be rate shopping during a period of mortgage rate upheaval?
Then, you go into the process knowing how to recognize a good rate, and being ready to lock it in.

Locking The Perfect Rate Is Like Hitting A Moving Target

Purchasing a home could be the most impactful financial decision you will make in your life. You want to capitalize on the lowest possible rate.
In an ideal world, you would know when to pull the trigger on a rate lock with perfect timing -- assured in the knowledge that rates have hit their relative lowest point. But with interest rates subject to change daily and even hourly, choosing the right time to pull the trigger on a rate lock can be difficult.
This is a matter best discussed with experienced mortgage expert who can review your unique situation and suggest relevant options.

Rate lock recommendation and increases in home value benefits

Investors should not be too quick to write off an interest rate hike by the Federal Reserve in December, despite market expectations increasingly looking to early next year as more likely, the former executive vice president at the New York Fed said today.



Rates continue to hover at a 28 week low and best execution for 30 year fixed rates at 3.75%-3.875% for borrowers with top tier scenarios.  I am recommending locking at these current rates for purchase and refinance as the market weighs in on China and other world economies to predict the direction the Federal Reserve will take in timing of the anticipated rate hike.

Home values continue their steady upward climb and my experience with multiple offers on correctly priced homes in the purchase market continues.  The highest success of offer acceptance in a competitive home sale market which we currently have is for clients who have a FULL credit approval letter, backed by a 3 bureau merged credit report, an Automated Underwriting System approval and supported with my underwriting teams review of income and asset documentation.

Mortgage rates and home values are also helping borrowers drop Private Mortgage Insurance on their conventional loans with a refinance to a new loan at lower 15 year rates and FHA borrowers convert their FHA loans to a new conventional loan with lower rate and no monthly mortgage insurance.

Call me at 801-540-5108 and we can review your purchase or refinance options!

Buying a home BEFORE winter

 It’s that time of year, the seasons are changing and with them bring thoughts of the upcoming holidays, family get togethers, and planning for a new year. Those who are on the fence about whether now is the right time to buy don’t have to look much farther to find four great reasons to consider buying a home now, instead of waiting.

Why buying a home before winter makes sense

1. Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report released recently projects appreciation in home values over the next five years to be between 11.2% (most pessimistic) and 27.8% (most optimistic). The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently (best mortgage rate of the year, today 10/7/14), most experts predict that they will begin to rise later this year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by the end of next year. An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3. Either Way You are Paying a Mortgage

As a recent paper from the Joint Center for Housing Studies at Harvard University explains: “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

Bottom Line

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.  

Mortgage questions?  Call 801-540-5108

Realtor referral available upon request

To get the ball rolling in your discussion about selling your home, I can help with mortgage questions you might have.  As a first step, it's always good to get an analysis of your current situation and to then get a credit approval into your hands.  Call me at 801-540-5108 with your mortgage questions.  

If you need a qualified Real Estate Professional to help with your home search, I can refer you to one of my trusted Realtor Business Partners for a worry free and pleasant home buying experience.  

Hurry, inflation will usher in higher mortgage rates!

Economic data ramps up this week and ends with the "Big Enchilada" on Friday, August 1st, with the July Jobs Report.

In the first half of this year, there has been an average of 230,000 new jobs created per month, above the 203,000 recorded per month in the first half of 2013.

Can these numbers be sustained and perhaps even move higher in the second half of the year?

If the numbers remain constant or increase, we could see inflationary worries, the arch enemy of bond prices.  As bond prices suffer (go down) because of inflation, or inflationary worries, rates will go in the opposite direction (go up).  

Today's additional headline was, "Worker's raises are back in vogue", raises additional worries that products will cost more at the wholesale level.  The monthly wholesale inflation report can be a market mover, but so far has been tamed by the unsettled world military climate overseas.  

As the summer draws to a close, it may be the perfect time to consider purchasing a first home, selling and upgrading or downsizing or looking at the 2nd home or investment home market.  

Inflation worries mean higher mortgage interest rates?

Inflation is the arch enemy of mortgage bonds and erodes bond prices.  The lower the bond price goes, the higher the mortgage interest goes.  The Federal reserve has done an excellent job of balancing growth of the U.S economy and their bond purchasing program has kept demand for Mortgage bonds high and mortgage rates low.  

With the latest poll from the Rasmussen Reports confirming what is happening with prices that we are paying for groceries, consumers are not confident that the Government (the Federal Reserve) won't have success in controlling inflation once the economy gets into full swing again.  If this becomes true , rather than a survey of what American's think MIGHT happen, we will see mortgage rates go up in the future.  

The Federal Reserve will be exiting the bond purchase program in October, 2014-this is their most recent estimate) and with inflation worries, this may be the best and last time to see these mortgage rates at the lows they are currently at (today's rates are the lowest they have been in 15 months). 

The report said that the number of Americans who are paying more for groceries also has risen to its highest level in over two years. There's an increasing lack of confidence, too, that the Federal Reserve Board can keep inflation under control.

A new Rasmussen Reports national telephone survey (95% confidence) finds that 88% of American Adults say they are paying more for groceries this year than the year before. 

This finding is up six points from last month and the highest since May 2012. Only seven percent (7%) say they are not paying more than they were a year ago, the lowest finding since January 2012. Five percent (5%) are not sure. 

Janet Yellen is a great choice!

Janet Yellen, I like you!  signed Marty Qualls

Do you know Janet Yellen yet?  She's being backed as Ben Bernanke's replacement. 

She's known for promoting low mortgage interest rates (I like her already!), a slightly higher inflation rate (she likes inflation because it promotes job growth!), and higher spending for teachers (what? Teacher's should be paid more?  I REALLY like her more now and so does my wife, Valarie!). 

Read more about her here, I think she's a GREAT choice (and pretty rich too!):
Jenet Yellen's philosophy

How much will rising mortgage rates cost you?

Mortgage rates are rising. An average 30-year fixed rate carried a 3.35% interest rate nine months ago. Today, the same loan will cost you 4.46%.  What does the rise in rates do to a mortgage payment?

Here is a chart of the average mortgage interest rates going back to 1980 to see how much monthly payments would be on a 30-year fixed-rate $250,000 loan. 

Source: Federal Reserve interest rate average for the year

If you take out a $250,000 mortgage with a 30-year, fixed-rate loan today, monthly mortgage payment will be $1,261, up from $1,145 a year ago, and down from $2,200 in 1990 and $3,489 in 1980.

Thank goodness we're probably not going back to 1981 interest rates anytime soon!  We have great rates today, call me to find out what you qualify for  and what your payments will be on the home you would like to purchase.  :)

Only 5% of homebuyer's expect rates to drop over the next 12 months

Among the questions asked in the May 2013 Fannie Mae Housing Survey was, "Do you expect mortgage rates to go up, go down, or stay the same in the next 12 months?".

Just 5% of those surveyed expect mortgage rates to drop.

This may be another reason why such a large percentage of respondents said "now is a good time to buy a home". When mortgage rates rise, buyers know, purchasing power wanes.
From today's levels, for every 1 percentage point higher which mortgage rates go, a buyer's maximum purchase price declines 11%.. Rising rates, therefore, can mean the difference between buying a home with 4 bedrooms or three; with 3 bathrooms or two; and with a three-car garage or two.

Rising rates can also mean the difference between buying or renting for another 12 months.
Homeownership is attractive to renters because U.S. homes remain affordable and mortgage rates are still quite low.  Plus, with the high-availability of low-downpayment loans including the Fannie Mae Conventional 97 program and various FHA program, choosing the best mortgage program for your needs is easier than ever.

Post Card just went out to my clients! Refinance Opportunities!

Refinance opportunities have arrived again!  Call me to review your options!  801-540-5108

Mortgage rates to rise, slowly

After reaching record lows in 2012, mortgage rates are expected to creep up slowly in the year ahead, the Mortgage Bankers Association predicted on Tuesday, October 23, 2012. 

Mortgage rates predicted to rise in 2013, slowly

Rates on the 30-year fixed-rate mortgage are expected to average 3.8% in the fourth quarter of 2012, rising to 3.9% in the first quarter of 2013 and eventually rising to an average 4.4% by the fourth quarter of next year, the MBA said. The 30 year mortgage rate is expected to average 4.1% for all of 2013.

Call me to review your purchase or refinance options at today's 'best rates in our lifetime!".  :)

Don't Procrastinate.

If you have a home loan call me for refinance analysis!

A post card hit my clients mailboxes today to remind them that rates are at near historic lows and if they have a home loan, they can probably see a significant savings each and every month by refinancing!

I'm encouraging my clients to call now to see how much they can save!

Gas Prices are UP.  Airline Travel is UP. 
Home Mortgage Refinance Rates are DOWN! 

2012 Arriving Like a Lion!

Consumer Confidence and Mortgage Rates are on the way up!

I am excited for 2012!  I read in the Ogden Standard Examiner yesterday that in a recent GfK Poll (1000 adults with a margin of error of plus or minus of 4%) that 68% of Americans believe 2012 will be a better year than 2011!

In the past, when I begin to hear news of lower unemployment numbers and lower initial unemployment claims (9 weeks in a row!) and THEN I hear a report of strong consumer expectations, we are on the road to see increased real estate activity, SOON!  

If low rates and low home prices are what you would like to take advantage of, DO IT NOW!  With stronger economic reports, increasing real estate activity, and the European financial crisis out of the headlines, we WILL see HIGHER interest rates and HIGHER home prices in 2012!

What are Treasury Securities?

With $72B worth of Treasuries to be auctioned off during this Holiday shortened week, I thought it would be a good time to review what Treasury Securities are.  Each type of securities and their auctions effect Bond prices and Bond yields.

Remember, the higher the bond price when they are sold at auction is usually good for Mortgage rates as Bond prices and yields move in opposite directions.  The higher the bond price and the success of the auction will usually result in better mortgage rates.  :)

Here's a quick overview of Treasury securities:

• Treasury Bills, or T-Bills, are sold in terms ranging from a few days to 52 weeks. Bills are typically sold at a discount from the par amount (also called face value). For instance, you may pay $990 for a $1,000 bill. When the Bill matures, you would be paid $1,000.
• Treasury Bonds pay a fixed rate of interest every six months until they mature. They are issued in terms of 30 years.
• Treasury Notes, sometimes called T-Notes, earn a fixed rate of interest every six months until maturity. Notes are issued in terms of 2,3,5, 7 and 10 years.

What does a Bond Chart tell you?

The beautiful thing about a Bond Chart is that it tells you where Bond prices have been and where Mortgage rates have been.  Can they tell the future?  Sometimes.  Here's how.

I study the bond charts all day long and I understand there are economic data or world news that negatively or positively influences the prices of bonds.  If bond prices go up, rates go down.  And vice versa, if bonds go down, rates go up.

So back to "how can the bond charts tell the future"?  The answer is simply this: History repeats itself.  You either love or hate history and it's the same with watching bond charts.  You either love it or you hate it and I love bond charts!

Because I watch Bonds all day long, I get familiar with floors of support and ceilings of resistance and can advise with a learned level of confidence a direction a client might consider and whether they should float or lock their interest rate.