Are Interest Rates Expected to Rise Over the Next Year?

<article class="post-2131 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-2131"><span class="entry-date">May 5, 2021</span><div class="entry-header center-block text-center"><h1 class="entry-title">Are Interest Rates Expected to Rise Over the Next Year?</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Are+Interest+Rates+Expected+to+Rise+Over+the+Next+Year%3F&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fare-interest-rates-expected-to-rise-over-the-next-year%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p><img alt="Are Interest Rates Expected to Rise Over the Next Year? | Simplifying The Market" class="webfeedsFeaturedVisual wp-post-image" decoding="async" link_thumbnail="" loading="lazy" sizes="auto, (max-width: 549px) 100vw, 549px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/05/04155408/20210505-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/05/04155408/20210505-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/05/04155408/20210505-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>So far this year, mortgage rates continue to hover around 3%, encouraging many hopeful homebuyers to enter the housing market. However, there’s a good chance rates will increase later this year and going into 2022, ultimately making it more expensive to borrow money for a home loan. Here’s a look at what several experts have to say.<span id="more-44319"></span></p>
<h5>
<a href="https://time.com/nextadvisor/mortgages/mortgage-predictions-2021/">Danielle Hale, <em>Chief Economist</em>, <em>realtor.com</em></a>:</h5>
<blockquote>
<p><em>“<strong>Our long-term view for mortgage rates in 2021 is higher. </strong>As the economic outlook strengthens, thanks to progress against coronavirus and vaccines plus a dose of stimulus from the government, this pushes up expectations for economic growth . . . .”</em></p>
</blockquote>
<h5>
<a href="https://time.com/nextadvisor/mortgages/mortgage-predictions-2021/">Lawrence Yun, <em>Chief Economist</em>, <em>National Association of Realtors</em> (NAR)</a>:</h5>
<blockquote>
<p><em>“<strong>In 2021, I think rates will be similar or modestly higher</strong> . . . mortgage rates will continue to be historically favorable.”</em></p>
</blockquote>
<h5>
<a href="http://www.freddiemac.com/research/forecast/20210414_quarterly_economic_forecast.page?"><em>Freddie Mac</em></a>:</h5>
<blockquote>
<p><em>“<strong>We forecast that mortgage rates will continue to rise through the end of next year</strong>. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.”</em></p>
</blockquote>
<p>Below are the most recent mortgage rate forecasts from four top authorities – <a href="http://www.freddiemac.com/research/forecast/20210414_quarterly_economic_forecast.page?"><em>Freddie Mac</em></a><em>, </em><a href="https://www.fanniemae.com/media/38961/display"><em>Fannie Mae</em></a>, the <a href="https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary"><em>Mortgage Bankers Association</em> (MBA)</a>, and <a href="https://cdn.nar.realtor/sites/default/files/documents/forecast-Q2-2021-us-economic-outlook-04-29-2021.pdf">NAR</a>:<a href="https://files.simplifyingthemarket.com/wp-content/uploads/2021/05/04155403/20210505-MEM-Eng-1.png"><img alt="Are Interest Rates Expected to Rise Over the Next Year? | Simplifying The Market" class="aligncenter wp-image-44320" decoding="async" height="488" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/05/04155403/20210505-MEM-Eng-1.png" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/05/04155403/20210505-MEM-Eng-1.png 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/05/04155403/20210505-MEM-Eng-1-400×300.png 400w" width="650"/></a></p>
<h3><strong>Bottom Line</strong></h3>
<p>If you’re planning to buy a home, purchasing before mortgage interest rates rise may help you <a href="https://www.simplifyingthemarket.com/2021/03/30/how-a-change-in-mortgage-rate-impacts-your-homebuying-budget/?a=712984-fa409495d5d70154d03a25e81e9540e2">save</a> significantly over the life of your home loan.</p>
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