Mortgage rates “will reach 4.5% by year end”

In a report this week the Mortgage Bankers Association stated: “Our forecast has mortgage rates increasing to about 4.5% by the end of 2015, and rising further next year.” Click here to read the full forecast.

Mortgage rates do fluctuate and vary from lender to lender. For example, despite the headlines, it was possible to find quotes at the end of this week for 30 year jumbo mortgages under 4%, while both 15 year FRMs and 5/1 ARMs  were available at 3 1/8%.

For fixed rate mortgages (FRM) the key benchmark is the yield on the US 10 year Treasury, so the quick and easy way to keep abreast of likely mortgage trends is to follow that one yield, which is widely quoted on a daily basis. The 30yr FRM rate is a margin or spread over the yield on the 10T. While the spread varies, so far in 2015 it has averaged 1.71%, so if you add that to the 10y Treasury yield, you will have a reasonable expectation of the 30yr FRM rate.

Source: US Treasury, Freddie Mac

Source: US Treasury, Freddie Mac

If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com.

Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
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