Mortgage rates are volatile and if you’re planning to buy a home or to refinance one, you will want to know what the future holds for mortgage rates. Rates are known to change on a daily, and even hourly basis. Since all home buyers are looking for the lowest rates, this nature is bound to cause anxiety.
Here are some trends for mortgage rates for the rest of 2016.
Past predictions for 2016
The good news is that all the predictions in 2015 for rates in 2016 have thus far been wrong. The rates were predicted to rise but haven’t done so and are at a 3-year low. It has varied between 3.5% and 4.25% in the first half of 2016. In fact, the rates have been displaying a downward trend for most part of the year. Mortgage rates are affected by economic factors like employment rates, GDP, the stock market, home sales, Federal Reserve policy changes, oil prices and Britain’s exit from the EU.
What could affect interest rates?
Geopolitical unrest and changes in the political landscape are other factors likely to affect rates. The US Presidential race and China’s banking woes are also likely to influence it. Rates will increase or decrease depending on how these economic factors improve or deteriorate. Of course, this applies to local circumstances as well, such as in Salt Lake City, where mortgage rates are at an all-year best, claims Altius Mortgage Group.
Some players in the market predict that the rates will rise marginally in the 4% – 4.625% range. The market generally agrees that the rates will rise gradually towards the close of the year. Others, however, say that you cannot predict the rates based on what has happened in the first half of the year.
Meanwhile, still others opine that it is unlikely that the world or the US will improve dramatically to drive up mortgage rates and that should be good news for home buyers, at least.