According to the Mortgage Bankers Association of the U.S.,
- The average fixed 30-year mortgage rate in the U.S. edged up 1bps to 3.01 percent in the week ended October 30th, 2020, remaining at near-record-low levels.
- The rates for jumbo loans, FHA loans, and 15-year fixed loans also set record lows.
As an investor or customer, the mortgage rates predictions 2020 and the mortgage interest rates forecast 2020 are the most important things you should be looking up.
Will the Mortgage Rates Go Down Tomorrow?
First things first, everyone has been wondering, “will the mortgage rates go down tomorrow?”. The downfall might seem captivating for buyers, but for investors, this might be an instant turn-off.
The rates, undoubtedly, have hit record lows several times this year. A study showed that the rates hit record lows 11 times till October 20th, 2020.
- Mortgage Bankers Association’s daily survey shows an increase in 30 YR FHA and 5/1 ARM rates
- The decrease in 30 YR FRM, 15 YR FRM, and 30 YR JUMBO
As I mentioned before, the decrease in rates might interest you if you are looking for a house. However, this decrement is not pleasant for investors. While the decrement is evident, the increment still leaves us with some hope for better future rates.
What Happens After Elections?
The most important question is, “what will impact the Mortgage rates if Biden wins and Republicans hold the Senate?”
Professional’s Point Of View:
· Mr. Rick Sharga (senior vice president at RealtyTrac) says;
“A split government might be the best possible outcome for the Mortgage industry.”
He continued, “because it would prevent overarching new tax policies that could impact investment and could impact the cost of homeownership.”
· The CEO and Chairman of Williston Financial Group also suggested,
“At this moment, there will be very little change if Biden wins and the Senate remains. People think Biden’s going to do this, going to do that. But he’s going to be handcuffed by the makeup of Congress.”
What Next From MBA’s Annual Event?
At Mortgage Bankers Association’s final event, Mike Fratantoni, chief economist, forecasted that Mortgage rates are likely to go up in 2021. He drew attention to the unequaled unemployment in 2020 alongside comparing it to the Great Recession (2007-2009).
Mike further continued, “it has come down to 10 million, but look at how that compares again to the peak in 2009 of 6.6 million, this has just been a tremendous negative shock for the economy as a whole.”
“This distrait is not going away soon,” Fratantoni warned. “Many of these workers, who thought they were on a temporary layoff, are now reporting a permanent job loss. Many of the employers thought they were returning to have gone bankrupt.”
He continued by saying that public health and safety demands certain restrictions, but as long as this crisis lasts, the economy will continue to suffer. He suspected that the recovery from the losses we faced in 2020, will take a lot more time.
“because the economic downfall will displace many people from the jobs they had chosen, their search for a brand-new job in a different sector of the economy, regardless of being successful, will take more time.”
Later, Mike forecasted that mortgage rates would steadily rise over the next year. He presented a chart showing that the 30 YR FRM interest rates will be at 3% by the end of this year and possibly hit 3.3% in 2021.
However, in my opinion, this year’s unemployment has been different from any other, be it the recession period itself. The economy cannot get better until the pandemic lasts; that can only be over with the invention of an approved vaccine.