Here’s some good news if you’re looking to buy or refinance in the near future.
Mortgage rates, specifically 30-year fixed mortgage rates, are expected to stay below five percent through to next year, according to mortgage financier Fannie Mae.
The 30-year fixed mortgage rate averaged 4.80 percent in the first quarter of 2011, 4.70 percent in the second quarter, and is expected to remain unchanged in the third quarter before rising back to 4.80 percent in the fourth quarter.
In 2012, it’s expected to rise to 4.90 percent in the first quarter, 5.00 percent in the second quarter, 5.10 percent in the third quarter, and you guessed it, 5.20 percent in the fourth quarter.
So maybe there’s not that much of a rush after all…
“With a downgrade of the outlook for economic growth and the unemployment rate, as well as an improving inflation expectation, we now expect the Fed to postpone hiking the Fed funds rate until the second half of 2012, instead of earlier in that year,” wrote Doug Duncan and Orawin T. Velz, in a market analysis released today.
“Long-term rates are projected to rise only modestly, with mortgage rates remaining below 5 percent through early 2012.”
In other words, continued bad news is keeping mortgage rates at bay, and with home prices still under a lot of pressure from swelling inventory, it could be wise to take your time.
The pair also lowered their projected purchase-money mortgage origination volume “modestly” and revised refinance loan origination volume “somewhat higher” for the current quarter.
For 2011, total mortgage origination volume is expected to decline to $1.07 trillion from an estimated $1.51 trillion in 2010, with a refinance share of 53 percent.
Tip: What mortgage rate can I expect?