Mortgage Rates to sustain housing demand
Mortgage rates to sustain housing demand
“We don’t foresee the Fed raising the federal funds rates in 2020. A rate cut of at least 25 basis points in early 2020 is the likely scenario,” says Yun. With the Fed maintaining a low-interest-rate policy, the 30-year fixed mortgage rate is expected to average 3.8% this year. Rates for 15-year fixed mortgages are also trending downward, from 3.4% to 3.1%. Low mortgage rates make purchasing a home more affordable, especially among the 46.5 million 25- to 34-year-olds who made up last year’s largest segment of home buyers. Given the existing conditions, home sales—existing and new homes combined—are expected to increase by a little over 4%, from 6 million in 2019 to 6.3 million in 2020.