Mortgage rates inched higher this week and have steadily increased since September. Freddie Mac reports that the 30-year fixed-rate mortgage rose five basis points this week to 3.73% with 0.7 in points and fees. In early September the rate was 3.49%. Freddie Mac says, "The risk of an economic downturn has receded and, combined with the very strong job market, it should lead to a slightly higher rate environment. Often, while higher mortgage rates are deleterious, improved economic sentiment is the reason that these higher rates have not impacted mortgage demand so far."
The National Association of REALTORS® (NAR) hosted its first-ever Real Estate Forecast Summit recently at the NAR headquarters in Washington, D.C. Economists who attended expect the U.S. economy to 'continue expanding next year while projecting real estate prices will rise and reiterates that a recession remains unlikely. Forecasters see 2% Gross Domestic Product in 2020 with an annual unemployment rate of 3.7%. In addition, the average annual 30-year fixed-rate mortgage will average 3.8% and in 2020 and 4.0% in 2021. Annual median home prices are forecasted to increase by 3.6% in 2020 and by 3.5% in 2021.