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Will Mortgage Rates Increase in 2017?The general consensus is that mortgage rates will move higher in 2017 but that hasn't happened yet and the year is almost half over. When Trump surprised everyone and won the election, 10 year bond yields and mortgage rates moved higher. 10 year yields increased from roughly 1.80 percent to 2.60 percent and average 30 year mortgage rates increased from 3.40 percent to 4.00 percent. Since then, both bond yields and mortgage rates are lower and in fact, both are lower overall in 2017. This wasn't supposed to happen because the Federal Reserve is in tightening mode and has increased rates twice since December 2016. While the Federal Reserve doesn't set mortgage rates, their rate changes do affect mortgage rates and the housing market. Mortgage rates tend to move in the same direction as 10 year bond yields because the 10 year note serves as a benchmark for mortgages and many forms of credit. When the fed funds rate is increased, bond yields move higher and mortgage rates also move higher. The same process happens but in the opposite direction when the fed funds rate is lowered. The Fed is expected to increase the fed funds rate two more times in 2017 and those rate increases will put more upward pressure on bond yields and mortgage rates. Will two more rate hikes actually produce higher mortgage rates? We believe so. Don't be alarmed though -mortgage rates won't move much higher from current levels. 30 year mortgage rates today are still under 4.00 percent, averaging 3.92 percent. At the beginning of the year, 30 year mortgage rates were forecast to hit 5.00 percent by the end 2017. We think this is highly unlikely at this point. A more realistic forecast is for 30 year rates to move up to 4.50 percent by the end of the year, which is only 50 basis points higher than today's average rate.
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 NMLS # 1168 State Lic # 11309
01/28/2021
Direct Lender. Billions Funded.
NMLS # 1168 State Lic # 11309
01/28/2021
Direct Lender. Billions Funded.
NMLS # 1168 State Lic # 11309
01/28/2021
Direct Lender. Billions Funded.
NMLS # 1168 State Lic # 11309
01/28/2021
Direct Lender. Billions Funded.
NMLS # 1168 State Lic # 11309
01/28/2021
Direct Lender. Billions Funded.
NMLS # 1168 State Lic # 11309
01/28/2021
Direct Lender. Billions Funded.
NMLS # 1168 State Lic # 11309
01/28/2021
Direct Lender. Billions Funded.
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