As the economy continues to rise from the recession, it's fair for current and potential homeowners to express concern about mortgage rates. Current rates are growing, but they are still lower than they were at this time last year "and within one percentage point of their lowest marks of all-time." According to mortgage market expert Dan Green, "home values are up more than 10 percentage points and the housing market's steady recovery has been a national news story since late-2012." This is a great time to step into the housing market or refinance your current home loan. You might also want to weigh your options and consider what the upcoming terms look like. While it's difficult to project future mortgage rates, experts can provide an educated guess that will help you prepare for a changing market.
Now Is the Time to Buy
A recent Forbes article notes that both short- and long-term rates will grow over the course of the year, "thanks to global demand for credit rising faster than global savings." As contributor Bill Conorly notes, "Long-term interest rates, such as mortgages and Treasury bonds, are driven more by worldwide financial forces, with smaller effects from Federal Reserve policy." In short, as the demand for credit rises, so will mortgage rates.
As you can see from the chart above, rate growth should not exceed 4.5% until the end of next year. However, with upcoming changes in Loan Disclosure forms and the timespan of the home loan application, homebuyers with tighter deadlines should take advantage of the current low rates.
If you're curious about how frequently home mortgage rates change over the course of a few months, check out the chart below.
As you can see, rates fluxuate quickly but continue to rise. All in all, 2015 probably presents a better opportunity for homebuyers looking for a good rate.
A lighter way to keep track of mortgage rate predictions is The Mortgage Report's Mortgage Rate Game. According to Dan Green, "Each week, players forecast whether mortgage rates will rise, fall, or remain unchanged. Their forecasts can be helpful to home buyers wanting to know in what mortgage rates will go in the future. They're also helpful to homeowners wondering whether now is a good time to refinance." Everyone is welcome to participate in this free game, though the top players are typically members of the mortgage industry. Real estate agents have also fared well. The game boasts a success rate over 60% and gives consumers a chance to see wide range of predictions while helping them identify which sources are the most trustworthy.
