How High Will Mortgage Rates Climb
Daily Real Estate News
The lowest mortgage rates on record have lured buyers during the last few years, but the Federal Reserve has already given plenty of signals that will soon come to an end.
Mortgage rates are already inching up, ever-so-slightly. From January to June, the 30-year fixed-rate mortgage climbed from 3.7 percent to 4.2 percent. Mortgage rates recently have been hovering around 4 percent.
In this latest era of super-low mortgage rates, what’s normal? A 6 percent interest rate is “normal,” says Jonathan Smoke, realtor.com®’s chief economist. He says mortgage rates likely won’t hit that point in the next two years, however.
We will likely see less than a 100 basis point increase over the next two years, which would bring us to around 5.5 percent in 2017.
If Smoke’s prediction holds true, mortgage rates will then remain below normal even in two years. However, that increase in rates would translate into a 12 percent increase in monthly payments over current rates.