April Forecast: Mortgage Rates Hovering Around 4.4% Through End of 2019

Real estate blogger

Highlights from this report:

  • A new industry forecast predicts that 30-year mortgage rates will average around 4.4% throughout the rest of 2019.
  • As of April 15, 2019, the average rate for a 30-year fixed mortgage was 4.2% according to Freddie Mac.
  • Home prices, meanwhile, continue to rise in most parts of the country, creating some urgency among home buyers.

On April 18, the Mortgage Bankers Association (MBA) published an update to its long-range “Mortgage Finance Forecast.” Among other things, this forecast makes predictions for the average rate assigned to home loans.

As of this latest outlook, the industry group expects that 30-year mortgage rates will average 4.3% during Q2 2019. Looking beyond that, they anticipate an average of 4.4% through the second half of this year.

In other words, they do not expect a major rate increase anytime soon.

Mortgage Rates Turned North in April, Following a Steady Decline

Mortgage rates have actually risen a bit over the past few weeks. This comes on the heels of a months-long decline that occurred during the first part of 2019.

In a nutshell: The average rate for a 30-year mortgage loan dropped considerably from November 2018 to March 2019. It then rose a few basis points during the month of April.

The chart below shows the average rate for 30-year fixed mortgages going back a year. This chart is based on the weekly market survey conducted by Freddie Mac, and sent to lenders nationwide.

Chart: Average 30-year mortgage rates through April 2019. Source: Freddie Mac.

You can see the steady decline mentioned earlier, which started back in November 2018. You can also see where rates started to climb again, in April 2019 (far right).

And that brings us up to the present. Looking forward, the MBA mortgage rate forecast suggests that home loan rates could inch upward over the coming months but remain somewhat stable.

Forecast Predicts Stability Over the Coming Months

In April, the industry group predicted that the average rate for a 30-year mortgage loan would be:

  • 4.3% for Q2 2019
  • 4.4% for Q3 2019
  • 4.4% for Q4 2019

Looking even further out, they predicted that rates would climb a bit in 2020 but remain below 5% (on average). Again, that’s for the 30-year fixed-rate mortgage in particular.

Did you know? While there are different types of home loans, the 30-year fixed-rate mortgage is the one used by the vast majority of home buyers in the U.S. That’s why it often gets singled out in news reports, forecasts, etc.

Here’s what home buyers and mortgage shoppers should take away from all of this:

There’s always a chance that mortgage rates could rise from one week to the next. After all, they fluctuate on a daily basis. But at this time, it seems that industry analysts do not expect to see a major spike in home loan rates. At least not in the near term.

Is Now the Time to Buy or Refinance a Home?

Despite the slight increase over the past four weeks or so, mortgage rates in the U.S. are still hovering at historical lows.

Home buyers who lock into a long-term, 30-year fixed mortgage loan could capitalize on today’s low rates while shielding themselves from future increases. That’s because a “fixed” mortgage typically keeps the same interest rate for the full term or life of the loan.

Many homeowners could take advantage of these trends as well. House values in the U.S. have risen steadily over the past few years. As a result, those who have owned a home for at least a few years should have more equity today. (And equity is one of things mortgage lenders look for, when considering a refinancing application.)

Related: When should I refinance my home?

Home Prices Still Rising in Most Cities

Home prices are a different story. While the latest forecasts predict some relative stability for mortgage rates, home values in most U.S. cities continue to rise.

According to the latest data from Zillow, the median home value for the U.S. rose by 6.6% over the past year. The company’s research team predicts that prices will continue rising over the coming months. “Zillow predicts they will rise 4.1% within the next year,” they wrote in April 2019.

That’s at the national level. When you drill down to local housing markets (cities and towns), it’s more of a mixed bag.

Some real estate markets are leveling off right now, in terms of home-price appreciation. But in most cities across the country, house values are still climbing and will probably continue to do so into 2020.

Bottom line for buyers: Mortgage forecasts suggest that rates will hover in the 4.4% range over the coming months. But home prices are still climbing in many markets. So those buyers who postpone their purchases until later in 2019 — or roll them over to 2020 — could end up paying more for a house.

Disclaimer: This article contains home price and mortgage rate forecasts issued by third parties not associated with the publisher. Economic predictions are the equivalent of an educated guess and should be treated as such.