How will mortgage rates change over the next year?

Nov 05, 2015

There has been some speculation recently regarding a potential increase in mortgage rates. It’s always difficult to predict with exact certainty how mortgage rates will change, however, based on the Federal Reserve’s meeting and announcement in October, it seems an increase in mortgage rates may be likely in the future. 

Some background on the subject: Federal Reserve policymakers raise and lower the Federal interest rate based on economic data. When the Federal interest rate is adjusted, mortgage lenders usually change the rates at which they issue mortgages to consumers accordingly.

The Federal Reserve’s target rate has not changed in 10 years, but given the current economy, there is much speculation that rates may go up as early as this December. According to a recent article on Mortgage News Daily, if early November’s economic data is flat or better, rates could rise fairly quickly. If the Federal Reserve does decide to raise rates, it is expected that the higher rates will be more than just a passing fad and could be long lasting.