Call (202) 596-8101 | Email us!
facebook linked in twitter youtube
Connect with us

Interest Rate Forecast for 2020

2019 was a year for surprises. We went into the year expecting interest rate hikes, fueled by a reset in the mortgage industry, recovering from a decade of extremely low rates. Plus, most analysts expected the Fed Funds rate to increase  several times through the year, as the Federal Reserve took measures to guide the extremely mature economic expansion. What a difference a year makes!

Instead of the anticipated rate increase, mortgage rates have remained very low after briefly increasing at the start of the year. So what does that mean for 2020?

Well, first, it means that predictions are just predictions – not set in stone. So whatever predictions are made for 2020, there is always the chance that circumstances will change throughout the year. That said, Greg McBride, CFA, Bankrate chief financial analyst, predicts mortgage rates will stay relatively stable 4 percent in 2020.

According to McBride, “The benchmark 30-year fixed rate mortgage will hopscotch back and forth over the 4 percent mark for much of 2020, remaining low enough to facilitate homebuying and providing ample refinancing opportunities on those trips below 4 percent.”

James Ferguson – web

As of right now, inflation is expected rear it’s ugly head toward the end of 2020. The PCE Index, which is the Feds’ bellweather measure of inflation, is expected to 2.2.% in the latter half of the year. So rate hikes are not expected early in the year, but may trend upword in the 3rd or 4th quarters. Once the PCE index tips over 2% is when rate creep may start occurring.

After rising slightly at the beginning of 2019, rates have remained below 4% since the end of June 2019. The lowest point to date occurred in Sept, when the 30-year rate hit 3.74%. Low rates mean that homeowners have been able to refinance into lower rate mortgages, thereby saving money, and new borrowers have enjoyed lower monthly payments. However, low rates have also kept buyers in the market, which has exacerbated the lack of adequate supply in the greater DC area. That doesn’t appear to be changing anytime soon.

When it is time to sell or buy a home, having a local team you can rely on will make the process a smooth one. Call the Realtors® who love where they live and understand the local real estate market. ADMC Realty Group happily serves the communities in and around the Washington DC, Maryland, and Northern Virginia areas. From start to finish, we’re here to help with all your Real estate needs. Give us a call at (202)596-8101 or email us at [email protected].

Leave a Reply

Affiliated with RE/MAX Allegiance | (202) 547-5600

Copyright © 2020 ADMCRealtyGroup    Log in     Design by Real Estate Tomato     Powered by Tomato Real Estate Blogs