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BugAC
LSU Fan
Baton Rouge
Member since Oct 2007
33661 posts

Primary Mortgage Interest Rates - Future Outlook
What's the future outlook for 30Year fixed mortgage interest rates in about 9 months? I'm in the process of building a house (still working on design/layout) and am trying to determine an educated guess on our house note. I have all of the information needed but the one variable is mortgage interest. This could determine how big/small our house is/amenities, things like that.

From what i saw we are 4.41% but we reached a high of 4.8 in November last year. I'm assuming the overzealous fed rate hikes won't be repeated this year. Thoughts?
This post was edited on 2/8 at 3:09 pm


HailToTheChiz
Auburn Fan
Back in Auburn
Member since Aug 2010
30096 posts

re: Primary Mortgage Interest Rates - Future Outlook
quote:

From what i saw we are 4.41% but we reached a high of 4.8 in November last year. I'm assuming the overzealous fed rate hikes won't be repeated this year. Thoughts?




I think they pump the brakes and leave it alone for awhile


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LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
14511 posts

re: Primary Mortgage Interest Rates - Future Outlook
I'd say plus or minus a third of a point from now.

I too agree that we likely won't see any significant fed interest rate hikes soon. We are trucking along at GDP expansion of close to 3%. which doesn't require fed intervention on way or the other.


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TDFreak
Florida Fan
Baton Rouge
Member since Dec 2009
3249 posts

re: Primary Mortgage Interest Rates - Future Outlook
It’s really a crystal ball when it comes to predicting future rates.

One misconception is that mortgage rates are tied to the Federal funds rate. The Federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight, on an uncollateralized basis.

Mortgages are more closely aligned with long term treasuries. A good rule of thumb is to add 200 basis points to the long term treasury rate to estimate 30 year mortgage rates.

Take today’s 10-year or 30-year treasury yield (currently around 2.7%), add 200 basis points, and viola! That’s our current mortgage rates (4.7%).

So your mortgage rate in 9 months is going to depend on how the economy does the next few quarters. Modest economic activity, and rates shouldnt rise much. If things take-off like gangbusters and the yield curve steepens, mortgage rates will definitely go up (regardless what the Fed does or doesnt do).
This post was edited on 2/8 at 8:19 pm


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bayou choupique
LSU Fan
the banks of bayou choupique
Member since Oct 2014
1105 posts

re: Primary Mortgage Interest Rates - Future Outlook
Bug, I’m building too and have an initial loan in place. She has me quoted on the high side but the feds agreed not to hike February or March. If the economy continues to do well it will rise some. She can you can lock in a rate but you pay for it one way or another. I am assuming I close in July at 4.7 or 4.8. Don’t be afraid to shop lenders either. I still may do a second shop right befor I close.


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SDVTiger
Hawaii Fan
Volcom Pipeline House
Member since Nov 2011
32226 posts

re: Primary Mortgage Interest Rates - Future Outlook
Not going over 5% within the year

You will be at a 4.875% worst case


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