Freddie Mac Says Mortgage Rates Will Slowly Rise Over Next Year

 

Mortgage Loan Rates On the Move Up

Freddie Mac (Federal Home Loan Mortgage Corporation) forecasted in July 2015 that interest rates would slowly rise over the next year, topping out at 5%.

As those rates rise, so do monthly house payments.

Freddie Mac's July 2015 interest rate outlook, 8-16-2015

Look at more detail on the numbers.

Moving from 4.125% (where mortgage rates are today) to 4.3%, their end of 2015 prediction, may seem like an insignificant change in the monthly payment, but it might be just the beginning.

For a detached median priced home at Orange County CA, it’s only a $672 increase each year; and for the median priced condominium, it’s only a $396 increase.

Remember that interest and mortgage rates will slowly rise.  As they do, before you know it, everybody will be talking about 5% interest rates as the new normal.  At 5%, the detached median sales price of an Orange County home now has a monthly payment that is $284 more than today’s payment.  That is a difference of $3,408 each and every year.

Locking in a mortgage rate today is like getting a free vacation every year for 30 years.

At 5%, the median sales price condominium has a monthly payment that is $170 more than today’s payment. That’s an extra $2,040, still a pretty considerable chunk of change.

By Harrison K. Long, Real estate broker, professional real estate representative, and Realtor, Orange County CA – CALBRE 01410855.  Source of some information for this article is Steven Thomas and his ReportsOnHousing.com.

About Harrison K. Long

Honored as "REALTOR® of the Year 2016" by the Orange County CA Associations of REALTORs®. Professional Realtor representative, GRI, real estate broker associate, HomeSmart Evergreen, at Orange County, California - CALBRE 01410855 - Helping property owners, estate trustees, executors and administrators, fiduciaries, bankers, investor group managers, with listing and sale of properties - with best decisions about homes and real estate. Orange County Association of REALTORs member, California Association of Realtors (member and now serving on its board of directors). National Association of Realtors, member - also an attorney member of the California State Bar Association #69137. Contact by cell or text at 949-701-2515.
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