Mortgage Rates on the Rise
We recently attended a conference featuring Dr. Lawrence Yun, Chief Economist for the National Association of REALTORS. Dr. Yun is positive about the Southwest Florida real estate market. He expects the migration of residents from other states to Florida to continue especially due to the new tax reform law. He cautioned attendees that interest rates will continue to rise throughout the year, despite a strong economy. He suggested to the REALTORS attending to advise their customers to buy sooner rather than later this year.
Since the Great Recession, now almost a decade ago, the economy has made almost a full recovery. Today, unemployment is in the low 4%s dropping from 10% as it was during that time. When the economy is doing well, interest rates usually rise. And, as Dr. Yun has suggested, if the economic expansion continues, rates may go up to 5% during this year.
Even though today's interest rates are moving upward, compared to the lowest rate levels ever recorded, they're not that bad. As an example, Freddie Mac reported that in their 2,457 weeks of data, only 380 weeks demonstrated lower interest rates than today's levels.
Agency 2018 Prediction 2019 Prediction
Mortgage Bankers Association 4.9% 5.4%
Freddie Mac 4.6% 5.1%
Fannie Mae 4.5% 4.5%
Realtor.com 5.0% No Forecast
National Association of REALTORS 4.5% 4.8%
Kiplinger 4.7% No Forecast
National Association of Home Builders 4.5% 5.0%