Real Estate News

New predictions show mortgage rate hikes

Published: 22 Feb 2017

Predictions from Goldman Sachs show a rising mortgage rate over the next few years, one that could see notable changes as soon as 2019. According to Reuters, the famous financial firm singled out 2019 as a watermark for a notable 30-year mortgage rate increase.

Analysts from the organization specifically forecast a 5.5 percent rate by that time, based on both existing data and the chance for further developments. This would come after a 150 basis point gain for mortgages, which would follow the current speculation over possible mortgage rate changes and impacts. Two analysts from the organization told the news source that new finance reform laws likely would take at least another year to get enacted, though.

Other, more industry-specific sources, have made predictions for the coming years and foreseen possible boons to the industry. The Mortgage Bankers Association, for example, has estimated growth as new market demographics make their presence known. A recent newsletter from this organization quoted Lynn Fisher, its Vice President of Research & Economics, on the trends to watch out for.

Fisher specifically spoke at the National Mortgage Servicing Conference & Expo., addressing the rise of "millennials and minorities." Though this could play out over the next decade, the effects could appear much sooner than this.

"If you fast-forward to 2019-2020, this cohort is going to be ready for homeownership," Fisher said. She added that, "we're going to build into this--it's a big group--but it's going to take some time," she said.

Fisher also echoed the 5.5 percent rate predicted by Goldman Sachs, after first reaching a level of 4.7 percent. During this time, the unemployment level will also decline, she said, adding to the competition in jobs and overall possible challenges for the economy.