Mortgage Rates Expected to Remain Stable and Low
If you’re looking to buy a home Bryan-College Station in the new year, here’s some good news: Mortgage rates are expected to continue to be low throughout 2020.
In 2019, the average 30-year fixed mortgage rate started 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.
What Do the Experts Say?
Greg McBride, Bankrate chief financial analyst, expects mortgage rates to stay relatively stable in 2020. At the time of publication of this blog, rates for a 30-year fixed mortgage are trending at 3.25% for borrowers with excellent credit scores of 740 or higher.
“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 homebuying and providing ample refinancing opportunities on those trips below 4 percent,” he says.
McBride cautions borrowers to keep an eye on inflation, especially toward the end of 2020. 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.
In the last half of 2019, interest rates for the 30-year fixed-rate mortgage stayed below 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 made it easier for many prospective homeowners to afford buying a home.
How will the Federal Reserve Impact New Homes in Bryan-College Station?
Of course no one has a crystal ball. But if the Fed’s attitude is any indication, rates should stay low next year.
One thing rate-watchers should consider is that we’re voting for a president in 2020, which may compel the Fed to take a backseat to the political action in D.C., says Tony Taveekanjana, executive vice president and chief production officer at Gateway First Bank.
“Obviously, there are no guarantees that mortgage rates will stay where they are for all of 2020. However, one significant factor is that 2020 is in an election year,” Taveekanjana says. “Historically, the Fed moves to the sidelines as it relates to rate hikes or cuts during the election and then steps back in to stimulate the economy by doing what they feel is necessary once the election is over. Based on this, it would be reasonable to expect rates to generally stay in the same area as they are now.”
What Does all this Mean for You?
If you’ve been waiting for mortgage rates to come down further, it’s sounding unlikely that will happen in 2020. However, home prices continue to rise – making the case for not waiting to buy Bryan-College Station new homes even stronger.
And if you’re looking to move into a new home sooner than later, check out our available inventory. We currently have homes ready for quick move in in Austin’s Colony and Oakmont.
Have questions about buying or building a new home? Looking for recommendations for a mortgage lender? Ask us! We’re here to help make your dreams of owning a new home Bryan-College Station come true.