It may only be the 10th day of the new year, but Jersey Shore home buyers are already clamoring for news about mortgage interest rates in the upcoming months. Will they go up or down? By how much? What should we expect to see happen in 2020? I talked about the steps you need to take now to move into a Jersey Shore home by the summer. But, no matter what time of year you plan on purchasing a property, find out what financial experts predict in mortgage rate news for this calendar year.
Mortgage Rate News: What to Expect in 2020
Towards the end of 2018, interest rates hit the 5% mark. By the end of 2019, reports showed rates just below 4%. As of this morning, Bankrate.com shows the 30-year fixed-rate average at 3.81%. The 15-year fixed-rate average was 3.16%. Overall, most experts agree that they expect rates to continue to hover around the 4% mark (just above or below). However, as the year nears closing, we might start to see them slowly trend upward again…but only slightly.
Federal Reserve’s Influence on Interest Rates
Earlier this week, Bloomberg News reported rumblings in the financial industry that the Federal Reserve might reduce their rate all the way down to zero. It currently sits at between 1.5% and 1.75%. And it hasn’t changed in several months. What does this mean for mortgage rates? Sometimes, the Federal Reserve rate influences mortgage interest rates. However, sometimes it doesn’t. Mostly, it affects how much you pay on things like credit cards and student loans. When the Federal Reserve’s rate goes down, so do the prime rates on these accounts. It also affects your interest earned on savings accounts, CDs, and money market accounts. When the Fed cuts its rates, banks cut theirs as well on these money-earning accounts. While that might not necessarily affect your mortgage rate, it could affect your rate of return on any money you might be saving up to use as your downpayment on a new property.
Bottom line: interest rates appear to be holding steady around 4% for most of the year. Even if they rise slightly higher than that, it’s still a fantastic rate to borrow money to buy a Jersey Shore home. With this being an election year, all of this could change at a moment’s notice. If you want to buy a new home in 2020, I highly recommend talking to someone at your bank right away. Or you could contact a Jersey Shore mortgage broker. I suggest setting up an appointment with Scott Beisler of Ocean First Bank. He’ll help you find the right loan for your needs at the best interest rate possible. Give him a call at (609) 464-1420 or shoot him an email. When you’re ready to start looking for your next Jersey Shore home, contact me.