Mortgage Rates Defy Forecasts and Decline in 2017
Mortgage rates were widely forecast to move higher in 2017 but that hasn't happened. In fact, mortgage rates have actually declined since the beginning of 2017. Now we are in the month of June, halfway through the year, and rates are still moving lower.
Back in January 2017, 30 year mortgage rates were above 4.00 percent, averaging around 4.25 percent. By the end of May, 30 year mortgage rates were back under 4.00 percent, averaging 3.90 percent. 30 year mortgage rates today are even lower, averaging 3.75 percent.
RatesORama.com, along with most mortgage related websites, forecast higher mortgage rates. One of the premier organizations in the mortgage business, the Mortgage Bankers Association, also forecast higher mortgage rates. Naturally, their forecast for average rates has declined each month as rates moved lower.
MBA Mortgage Rate Forecasts
January 19th Forecast
April 18th Forecast
June 12th Forecast
The MBA's forecasts will certainly come down again next month since the 2nd quarter of 2017 is almost over and average 30 year rates are at 3.75 percent.
Future Direction of Mortgage Rates
RatesORama.com now forecast average fixed mortgage rates to hover around current levels for the rest of 2017. That would mean 30 year rates will remain around 3.75 percent and 15 year mortgage rates will remain near 3.00 percent.
Shorter term adjustable mortgage rates are more susceptible to short term bond yields moving higher. The Fed is expected to increase the fed funds rate once more in 2017. The increase will be 25 basis points, which will likely force short term mortgage rates up 25 basis points.
Current average 5 year adjustable mortgage rates are at 3.15 percent. A 25 basis point increase will put 5 year adjustable rates around 3.40 percent. 7 year adjustable rates currently averaging 3.35 percent will move towards 3.60 percent.
RatesORama.com Average Mortgage Rates