Mortgage Rate Forecast for December 2015
As we approach December 2015, mortgage rates are still much lower than predicted. According to Freddie Mac’s weekly mortgage rate survey, 30 year mortgage rates are at a nationwide average of 3.95%. Rates for the Greater Chicago area are slightly higher in the low 4s, but much lower than experts had estimated for this time in 2015.
Because mortgage rates have been low in 2015, today’s home buyers can afford 7% “more home” compared to January 2014. With rates still so low, home buyers are able to purchase higher priced homes and current homeowners are in a position to refinance. Refinance loan volume is up substantially, not just in the Greater Chicago area, but nationwide.
Job growth has lagged for the most part in 2015, however the most recent jobs report in mid-November suggested a more positive turnaround. The release of the next Non-Farm Payrolls report coming out on December 4 will have an influence on the mortgage rates for the month.
Inflation is another factor that plays into mortgage rates. Inflation has been low, stable and beneath the Federal Reserve’s target rate of 2% since 2012. Rising rates of inflation will cause mortgage rates to rise, whereas receding rates will result in lower mortgage rates.
Generally speaking, predictions for where interest rates will be in December are mixed. The general consensus all year is that rates would solidly increase but as of today, this has not happened yet. Rates could round out the year higher into the fours, they may stay low or they may even retreat even lower into the 3s. The rate borrowers are able to obtain will be based on timing, luck and inflation.
Call one of our loan officers today to determine what interest rate you can obtain for the purchase of your new home or for the refinance of your current home: 708-531-8388.