The 2020 mortgage market and the real estate market, in general, has been very interesting so far. Its level of uncertainty is something we have never seen before. So far, mortgage rates have hit all-time low 11 times this year alone. And with the countdown of the general election almost over, we don’t know what to expect in the near future.
The previous general election years, 2012 and 2016, were followed by a swift downward trend of mortgage rates, followed by a speedy skyrocketing. This year, we don’t know what could possibly happen since the market conditions are different due to the persistence of the COVID-19 pandemic.
However, for the next 90 days, mortgage rates are expected to trend as shown in the chart below;
November predictions.
In the case of the last election year, mortgage rates began to increase fast the day after the election. The rates increased so quickly that many home buyers and those seeking refinancing were priced out of the market. This happened because the markets were prepared for a harsher business environment under Hillary Clinton. When the opposite happened, and Trump won, markets had to shift gears quickly, as investors saw that the following four years would be business-friendly.
Currently, it’s like the situation is repeating itself. Markets expect Biden to win, but the results could come out the other way. A Trump win could result in a scenario where rates surge, leading to a loss of all the mortgage improvements recorded so far. If you aren’t willing to risk your homeownership or refinancing, you should consider locking right away.
What would the unveiling of a viable COVID-19 vaccine do to mortgage rates?
A viable COVID-19 vaccine would be a win for humanity but a risk for mortgage rates. The ongoing pandemic is solely the reason for the favorable rates we see currently. With a vaccine, things would go back to normal; markets would rally, governments would withdraw stimulus funds, and people would go back to work. This is excellent news. However, mortgage rates would rise with a recovering economy.
Unfortunately, the hope for a widely available and viable vaccine in the next six months is very dim.
With everything that is going on, the Fed has assured Americans that it will do what it possibly can to keep rates favorably low. With its recently reinforced long-term strategy of suppressing rates until at least 2023, the rates are likely to remain low for some time. This means that if you’re ready to buy or refinance a home, this is the perfect time to lock-in.
Moreover, housing agencies country have given mortgage rate predictions for 2021 as shown below;
| Agency | 30-Yr Rate Prediction |
| Fannie Mae | 2.80% |
| Wells Fargo | 2.89% |
| Freddie Mac | 3.00% |
| National Assoc. of Home Builders | 3.00% |
| National Assoc. of Realtors | 3.20% |
| Mortgage Bankers Assoc. | 3.30% |
| Average of all agencies | 3.03% |
At The Power Is Now, we’re committed to keeping you up-to-date with what is happening around the real estate market across the U.S. We also continue to advocate for advocate homeownership, wealth building, and financial literacy for low to moderate-income and minority communities. In this regard, we have a team of professional realtors— VIP Agents stationed nationwide to help you with anything you need in attaining your homeownership dreams. You can get in touch with the VIP Agents at https://www.thepowerisnow.com/thepowerisnownew/vipagentsservices/. If you can’t find an agent from your area, you can contact me directly for a referral. Also, ensure you stay updated with any developing real estate market news by regularly checking our blog page at https://www.thepowerisnow.com/thepowerisnownew/blog/. You can also set up an appointment to speak directly to me at https://calendly.com/thepowerisnow/ericfrazier.
Disclaimer: The views and opinions of Eric Lawrence Frazier are his own and do not necessarily represent First Bank or any organization affiliated with Eric Lawrence Frazier, or the Power Is Now Media Inc. First Bank is an Equal Credit Opportunity Lender. Eric Lawrence Frazier, MBA, is also a Vice President and Mortgage Advisor with First Bank. NMLS#461807 and a California Licensed Real Estate Broker DRE# 01143482. Email: Eric.frazier@fbol.com. Ph: 714- 475-8629.
Eric Lawrence Frazier MBA
President and CEO
The Power Is Now Media Inc.
Work cited.
https://themortgagereports.com/32667/mortgage-rates-forecast-fha-va-usda-conventional.
