The average American household has a mortgage debt of $156,333 according to various facts shared by Federal Reserve. Most home owners invest in mortgage loans when building their dream homes or shifting into an urban flat in a busy city. 14% of homeowners with a mortgage loan have applied for various type of personal loans for people with bad credit. Think about that for a second, 14% of homeowners resort to bad credit loans which has a huge impact on interest rates.
Since owning your own home is one of the important necessities of a family, it does become essential that you understand about the current forecast of mortgage interest. This knowledge would help you extensively when you are undertaking a mortgage loan in the near future. Below for your convenience we have analyzed a few forecasts made by financial experts below.
What does Freddie Mac predict?
Freddie Mac is the giant among government sector companies which sells and buys securities which are mortgage backed. Weekly surveys are undertaken and this was started way back in 1971. Their last year survey had indicated that there would be a drop in the 30 year home loan rates and this happened when the rates dropped to 4.10% in September 2014.
The rate had originally been 4.53%. In 2015 Freddie Mac Company has foretasted that there would be a rise in the area of fixed mortgage rates of 30 years. If this does happen then home owners undertaking new mortgage loans and homeowners who are planning to refinance their mortgage loan because they need to free up quick cash would have to pay higher rates. A representative of the company has spoken in a press release that the fixed mortgage rate would be around 5% for 30 years mortgage loans.
What is the opinion of Mortgage Bankers Association?
The MBA or the Mortgage Bankers Association has another opinion in this matter. Dr Bill Conerly an expert from the National Center for Policy Analysis is of the opinion that mortgage rates of 30 years loans would be up by 6% by the end of 2015. The interest rate would grow as the economy is becoming stronger in nature.
What are the predictions made by Home Buying- Institute?
HBI’s Mortgage Interest Rates Forecast is that the interest rate would be higher in the closing months of 2015. The growth of mortgage interest rates some feel is due to the fact that Federal Reserve is closing up the QE or the stimulus program known as the Quantitative Easing. However experts at HBI feel that the impact felt would be much lesser than what was originally foretasted.
What do economic experts have to say about this?
Many economists had foretasted a sharper growth in mortgage rates in 2015. The main reason being as the Federal Reserve had began to close away the stimulus program. Here some economist quickly point out the fact that when the Federal Reserve started reducing their purchase levels of bonds, the mortgage rates reduced considerably. The rates fell by 0.43% during the last months of 2014 and in the beginning months of 2015, the rates started gradually increasing. Thus economic experts recommend the forecast made by Freddie Mac is important and also maintain that these rates are rising as the economy is being revived considerably.