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Economics 101 • Mortgage • December 15, 2017

Rate Recap

by Fort Collins

The Federal Reserve raised interest rates by 0.25% this week. It was their 3rd rate increase this year.

This has us thinking about mortgage rates.

Today, 30-year mortgage rates are 3.93%.

Let’s put this in context with a little history lesson. Mortgage rates were…

  • 3.90% 6 months ago
  • 4.13% 1 year ago
  • 3.54% 18 months ago
  • 3.32% 5 years ago
  • 5.96% 10 years ago
  • 7.15% 20 years ago

So where are rates headed? Given that the Federal Reserve is expected to raise their rate three to four more times in 2018, we expect mortgage rates to be higher one year from today.

The Mortgage Bankers Association predicts rates to be 4.8% in the 4th quarter of next year. Freddie Mac’s prediction is 4.4%. If these predictions are true, that would mean mortgage rates would be back to where there were 6 to 7 years ago.

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