Experts claim interest rates will rise, but projections on how much differ.
With a new year quickly approaching, experts are expecting to see rising interest rates. According to Market Watch, Fannie Mae predicts that mortgage rates will climb to an average of 3.4% for a 30-year fixed rate loan next year, Freddie Mac comes in at 3.5% in its October quarterly forecast, and the Mortgage Banker’s Association predicts a rise in rates to 4% by the end of 2022.
Many of the pros we spoke to said the same. “I expect mortgage rates to slowly rise to 3.6% by the end of 2022,” says Daryl Fairweather, Redfin chief economist. “The Fed is tapering mortgage backed security purchases and we will feel the effects in mortgage rates.” What’s more, “inflation, accompanying a stubbornly recovering economy, is pressing upward on mortgage rates. The remedy — a stricter monetary policy — will cause mortgage rates to rise, too,” predicts Holden Lewis, home and mortgage expert at NerdWallet.