California mortgage rate forecast at a glance: Economists expect the average 30-year loan rate to rise to around 3.6% by the end of 2016, and to continue climbing slowly in 2017. Thirty-year rates could rise above 4% during the first half of 2017, according to one prominent forecast.
It’s October, and the end of the year is fast approaching. That means a lot of California home buyers are already looking ahead to 2017. And many are wondering the same thing: Will mortgage rates rise in 2017, and if so by how much?
Unfortunately, there is no way to predict future interest rates with total accuracy. But there are a couple of forecasts out there you might find interesting. One comes from the Mortgage Bankers Association (MBA), and the other comes from the economic research team at Freddie Mac.
Here are two mortgage rate forecasts for California home buyers in 2017.
Forecast: California Mortgage Rates to Rise Gradually in 2017?
California mortgage rate forecasts come from a variety of sources. Below, we have selected two of the most knowledgeable sources — Freddie Mac and the MBA. Both of these organizations have teams of economists and analysts that issue forecasts relating to mortgage rates in 2017 and other housing conditions.
Freddie Mac’s Outlook
The first California mortgage rate forecast comes from Freddie Mac, the government-controlled corporation that buys mortgage loans and sells them into the secondary market. The economists at Freddie Mac routinely publish housing insights and outlooks covering a variety of topics.
In their most recent forecast for home loan interest rates, published in September 2016, the company stated the following:
“We expect [30-year] mortgage rates to gradually rise in the coming months, ending 2016 around 3.6 percent and averaging 3.6 percent for the year. This would be the lowest annual average in the past 40 years. Next year, we expect rates to drift modestly higher, ending 2017 at about 3.9 percent and averaging 3.7 percent for the year.”
This echoes the forecasts and predictions being offered by other analysts, including the MBA (see below). Many industry watchers expect to see a slight and gradual increase in mortgage rates as we move into 2017.
California home buyers and refinancing homeowners should take note. If you postpone your home purchase or refinance until later in 2017, you might end up paying a higher mortgage rate on the loan — based on these forecasts, at least.
Mortgage Bankers Association (MBA)
The second rate forecast comes from the Mortgage Bankers Association (MBA), which recently predicted a gradual upward trend through the end of this year and into next. The MBA expects the average rate for a 30-year year home loan to reach 3.7% by the end of 2016, and to continue rising gradually throughout 2017.
Here is their latest forecast for 30-year mortgage rates, issued in September:
- Q1 2017: 3.9%
- Q2 2017: 4.1%
- Q3 2017: 4.3%
- Q4 2017: 4.4%
Granted, the MBA made a similar prediction at the end of 2015, which didn’t come true. In December 2015, they predicted that the average rate for a 30-year home loan would rise to 4.8% by the end of 2016. But that seems unlikely, since the current average (as of October 5, 2016) is hovering around 3.4%.
In closing, we leave you with one final California mortgage rate forecast through the end of 2017. It comes from Kiplinger, the Washington, D.C.-based publisher of business forecasts and personal finance advice. In October 2016, the publisher said that we should “Expect the average 30-year fixed rate mortgage to edge up to only 3.7% by the end of 2017, with 15-year rates below that.”
Disclaimer: This article includes California and national mortgage rate forecasts for 2017. Predictions were provided by third parties not associated with our company. Readers should view these forecasts and predictions as an educated guess, not facts or assertions.