Yun: The era of ultra-low mortgage rates is over. Mortgage rates are expected to rise to 4.5 percent by the year-end 2017, and even higher by the year-end 2018. Inflation will be noticeable as rent growth continues. A larger federal budget deficit will also nudge up rates. Smoke: Mortgage interest rates will be up by at least 50 basis points in 2017 on top of where they will end 2016, which is likely to be the highest rates seen in more than a year. Muoio: Mortgage rates are likely to rise in 2017. Mortgage rates spiked following the election on expectations
for a higher-inflation environment due to rising expectations of increased spending and tax cuts. Treasury yields could continue to rise in alignment with these expectations. The Fed is also likely to continue raising the federal funds rate after holding tight through most of 2016, suggesting mortgage rates should increase beyond the historical lows seen in 2016, though rates remain very low by historical standards and we are expecting the Fed to continue taking a gradual approach. Gardner: The election sparked a major jump in bond yields which pushed rates up very quickly. Given this jump I have
recalibrated my forecast and the result suggests that the average 30-year fixed rate will end 2017 at around 4.4 percent. Villacorta: Mortgage interest rates are likely to remain relatively low in 2017, albeit markedly less attractive than the rock bottom rates of 2016 to both buyers and homeowners. The Fed’s ‘relatively soon’ interest rate hike will result in a housing market with less affordable homes nationwide. While the cost of borrowing is still relatively low for many buyers, any additional rise in interest rates would further stifle market activity and could result in
NET HOUSEHOLD FORMATION, 1961 - 2025 12.5 million households will be formed over the next decade.
Source: John Burns Real Estate Consulting LLC calculations using U.S. Census Bureau decennial data. | *projection
ATTOM Data Solutions • P9
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