2016 was a tumultuous year for everything from the arts to politics. Major events like Brexit and the U.S. presidential campaign left people shocked and the economy reeling. The shockwaves of 2016 haven’t even begun to subside, either. Many of the events that occurred in 2016 are going to have a big impact on what happens in 2017. That includes the mortgage market. Our mortgage rate forecast software will be at the forefront of letting you know where the market is heading. Until the New Year arrives, though, let’s take a look at some of the predictions experts are making for the mortgage market in the coming year.
The Wall Start Journal published an article on December 11th exclaiming that “Rising Mortgage Rates Could Threaten Housing Demand in 2017.” The article says that after seven years of low rates, hikes that could be coming in 2017 could lock homeowners into their current mortgages.
“A sustained period of rising rates could freeze homeowners with rock-bottom mortgages who otherwise might want to trade up for bigger or better properties.” – Laura Kusisto for The Wall Street Journal, December 11, 2016
In other words, for homeowners who have locked in their low-interest rates on their current mortgages, rising interest rates could with dissuade them or completely lock them out of purchasing a different property thanks to higher monthly payments. That means there are likely to be fewer homes on the market for sale as people choose to stay where they are, creating a demand. The Wall Street Journal article also states that many economists expect mortgage rates to continue to rise throughout 2017. That means that those people considering the purchase of a new home would be wise to do it sooner rather than later before rates continue to go up.
It’s not all bad news, though. Along with higher mortgage rate predictions come higher wage earning predictions. The labor market is tightening, and we’re seeing higher wages because of it. That means that even with higher monthly mortgage payments, more people are going to be able to pay those higher prices. They will also be willing to pay more than the recommend 30% of their income towards their housing. The housing market continues to get stronger across the country, too. Areas of Florida, Colorado and Texas are showing tremendous growth.
With the turmoil of 2016 promising to carry over into 2017, you will need to stay on top of the mortgage rate forecast. While rates are expected to go up, no one knows for sure that it will happen or how much and how quickly they’ll rise. Market Alert can keep you informed and give you the latest mortgage rate forecast when and where you need it. Learn more about TrueCast MBS Forecasting so you can visualize the future of the mortgage market with our easy-to-read forecasting system that keeps you in-the-know. Sign up for a free one-week trial on our website today and make sure that you always know what’s happening with the mortgage market, no matter what 2017 brings.