If you’re looking to buy an investment property in the new year, there’s good news: Today’s low mortgage rates are expected to continue into 2020. The average 30-year fixed mortgage rate started 2019 at 4.68 percent and steadily declined before closing out the year at 3.93 percent. In 2020, rates are expected to remain mostly stable, not straying too much higher or lower from the 4 percent mark. Here are responses from a range of experts predicting what will happen to mortgage rates in 2020.
Expect mortgage rates to remain low
Greg McBride, CFA, Bankrate chief financial analyst, predicts mortgage rates will stay relatively stable around 4 percent in 2020. “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 home buying and providing ample refinancing opportunities on those trips below 4 percent,” he says. Inflation is something borrowers should watch for, especially toward the end of 2020, McBride says. Core inflation, as measured by the Fed’s PCE Index, will top out at 2.2 percent, he predicts, which will likely keep the Fed muted on rate hikes. “Rates will trend higher toward the back half of the year as inflation readings move above 2 percent.” Since the end of June 2019, interest rates for the 30-year fixed-rate mortgage have stayed south of the 4 percent mark. They hit their lowest point on Sept. 4, dropping to 3.74 percent, according to Bankrate data. These historically low rates have helped homeowners save money by refinancing and made it easier for folks to afford to buy a house.
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