Mortgage rates began the year nearly a full percentage point lower than they were at the beginning of 2019 and are expected to stay that way throughout the year. “There’s been hardly any movement at all in either direction. For 2020, Fannie Mae, Freddie Mac and the Mortgage Bankers Association expect rates to be relatively flat to where they were last year,” says Nelson De Leon, Capital Markets Director for Homeowners Financial Group. And that’s good news for consumers because last year, the average rate on a 30-year fixed mortgage was 3.7%, compared to an average of 4.8% in 2018.
But what if the Federal Reserve Board lowers the federal funds target rate during 2020? While it’s a hotly debated topic on Wall Street, no one know for sure what the Fed will do. But De Leon says any moves they make are unlikely to have a significant impact on mortgage rates. That’s because whatever the Fed is expected to do gets priced into the market before the board meets to decide whether to raise or lower the target rate. Unless the market’s caught by surprise, mortgage rates don’t typically move much after the Fed’s announcement, he says. “I don’t anticipate anything out of the ordinary happening in terms of mortgage rates in 2020 unless something unexpected happens on the geopolitical scene,” De Leon added.
If you’ve been putting off buying a home, now could be a great time to take advantage of rates that are near historic lows. No matter what type of mortgage you’re looking for, we can help. Give us a call today to get started or to learn more.